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GM beats expectations

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From Staff and Wire Reports The Spokesman-Review
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General Motors Corp. Chairman and Chief Executive Rick Wagoner won a little bit of driving room Wednesday when his troubled company reported second-quarter results that far exceeded Wall Street expectations.

Although GM’s net loss was $3.2 billion, that was mostly because of an anticipated charge for employee buyouts and other restructuring costs. Without one-time charges, the company would have earned $1.2 billion, or $2.03 per share – a number that sent shares up more than 4 percent.

Wagoner has been under pressure to reverse the fortunes of the world’s biggest automaker, which lost $10.6 billion last year and faces intense competition from Asian rivals.

Billionaire investor Kirk Kerkorian, who owns 9.9 percent of the company, has pressed GM to join an alliance with Renault SA and Nissan Motor Co., fueling speculation that Kerkorian would rather see Renault-Nissan Chief Executive Carlos Ghosn running GM.

The strong quarter took some of the heat off Wagoner.

GM shares rose $1.34, or 4.4 percent, to close at $32 on the New York Stock Exchange. They have traded in a 52-week range of $18.33 to $37.57.

Without one-time items, GM said it earned $1.2 billion, or $2.03 per share. That was significantly ahead of the 55 cents per share forecast in a survey of analysts at Thomson Financial.

•Steep costs to settle a government investigation and pay for delays to an airborne surveillance system sent Boeing Co. to its first quarterly loss in three years.

Boeing strengthened the outlook for its resurgent commercial airplane business at the same time it announced the $160 million second-quarter deficit Wednesday. But it also reduced its 2006 earnings guidance, and its stock fell.

Boeing shares closed down $3.85, or 4.6 percent, to $79.90 on the New York Stock Exchange after sinking as much as 5 percent in the wake of the report. The stock has traded in a 52-week range of $62.01 to $89.58.

•Spokane-based Itron Inc. reported record second-quarter earnings Wednesday, saying profits jumped 9.6 percent to $10.2 million, or 39 cents a share, from $9.3 million, or 38 cents a share, a year earlier.

Increases in higher revenue and profits result from its electricity meter business and lower interest expenses, company executives said.

The earnings did not include a $7.6 million expense for the amortization of intangible assets or a $1.8 million charge relating to an accounting change.

Itron makes and designs equipment and software used by electric, gas and water utilities worldwide. It reported revenue of $163.8 million, up 21 percent from $135.1 million a year ago. Most of the revenue increase arose from an increase in the number of automatic meter reading units sold.

Company CEO LeRoy Nosbaum also predicted 2006 revenue to range between $625 million and $635 million, up from the previous guidance of $610 million to $620 million. Itron estimates net income to range between $31 million and $33 million. The company expects 2006 pro forma earnings of $2.25 to $2.30 per share, above the $2.23 expected by analysts.

•Nighthawk Radiology Holdings reported record earnings of $5 million, or 17 cents per share, during the second quarter, compared to losses of $8.8 million for the second quarter of 2005. The 2005 losses include a $10 million non-cash charge.

Revenue for the Coeur d’Alene firm increased 51 percent during the first half of the year to nearly $43 million.

•Telecom equipment maker Lucent Technologies Inc. said Wednesday that profit declined in the third quarter as North American sales weakened.

Lucent, which will be acquired by Paris-based former rival Alcatel SA by year’s end, reported net income of $79 million, or 2 cents per share, for the quarter ending June 30. That’s down from $372 million, or 7 cents per share in the year-ago period, when the firm benefited from a gain of $127 million, or 2 cents per share, from favorable tax items and recoveries of bad debt.

Revenue for the Murray Hill-based company fell to $2.05 billion from $2.34 billion, driven in part by a nearly 17 percent decline in U.S. revenues compared to the same period in 2006.

Lucent shares rose 1 cent to close at $2.09 on the New York Stock Exchange, trading at $2.08 per share. The stock has been trading in a 52-week range of $1.99 to $3.49 per share.

•Stronger beer sales, especially outside the United States, helped lift Anheuser-Busch Cos. Inc.’s profit by 7.4 percent in the second quarter, the biggest U.S. brewer said Wednesday. It also boosted its dividend.

The maker of the nation’s best-selling full-caloried and light beers, Budweiser and Bud Light, earned $638 million, or 82 cents per share, in the April-June period, up from $594 million, or 76 cents per share, in the same period a year ago.