Financial services earnings give GM 49 percent profit boost

General Motors Corp.’s second-quarter profit rose 49 percent, boosted largely by record earnings at its financial services arm but offset by continued losses on the automotive side in Europe.

Its global and North American market share declined.

The world’s largest automaker said Wednesday it earned $1.34 billion, or $2.36 a share, in the April-June quarter, up from $901 million, or $1.58 a share, a year ago.

The Wall Street consensus for earnings in the most recent quarter was $2.24 a share, according to a survey by Thomson First Call.

Revenue rose 7.1 percent to $49.1 billion from $45.9 billion a year ago.

“Overall, our financial results for the quarter were reasonably good,” Rick Wagoner, GM’s chairman and chief executive, said in a statement. “General Motors Acceptance Corp. once again had an outstanding quarter … and our automotive operations reported improved earnings as well.”

• Starbucks Corp. said Wednesday that profits grew nearly 44 percent in its fiscal third quarter, helping the fast-expanding coffee company raise its full-year earnings estimates.

For the three months ended June 27, the Seattle coffee retailer reported earnings of $98.1 million, or 24 cents per share, up from $68.4 million, or 17 cents per share, in the same period a year earlier.

Revenue surged 27 percent to nearly $1.32 billion, up from nearly $1.04 billion in the year-ago period.

Starbucks now expects to open 1,500 new stores globally in fiscal year 2005, up from about 1,300 new stores in the current fiscal year.

• A hefty surge in international sales helped EBay Inc. post second-quarter earnings Wednesday that more than doubled, narrowly beating Wall Street’s expectations.

For the three months ended March 31, the online auction giant earned $190.4 million, or 28 cents per share, compared with $91.9 million, or 14 cents per share in the same period of 2003. Excluding special items, eBay earned $197.7 million, or 29 cents per share, up from $103.1 million, or 16 cents per share, in the first quarter of 2003.

The San Jose, Calif.-based company reported second-quarter revenue of $773.4 million, up 52 percent from the same period last year.

The company — considered one of the most financially conservative in Silicon Valley — slightly boosted its outlook for the rest of the year. The company now expects 2004 sales as high as $3.185 billion, $35 million higher than it previously predicted.

EBay executives said they based their optimistic outlook for the rest of the year on the strength of the company’s PayPal payment transaction division, and eBay’s fledgling operations in China, India and other international markets.

• AT&T Wireless Services Inc.‘s earnings declined 73 percent in the second quarter from a year ago as industry price wars drove down the average revenue from each customer while the company’s expenses increased.

The Redmond, Wash.-based wireless telephone giant reported Wednesday it earned $61 million, or 2 cents a share, in the April-June period, down from $228 million, or 8 cents a share, a year ago.

Revenue edged up to $4.22 billion for the quarter from $4.16 billion for the same period last year.

But average revenue per user declined to $58.80, down from $60.60 a year ago.

The customer churn rate, or the percent of customers who leave for competitors, also increased, to 3.4 percent a month in the latest quarter from 2.2 percent in the year ago quarter.

• Wireless provider Nextel Communications Inc. more than quadrupled its second-quarter profits due to a one-time tax benefit and the addition of more than a half-million subscribers to its mobile phone service.

The Reston-based company on Wednesday reported earnings of $1.30 billion, or $1.12 cents a share, in the quarter ended June 30, up from $281 million, or 27 cents per share, in the year-earlier quarter. The recent quarter’s profit included a tax benefit of $726 million, or 65 cents a share, and an expense of $34 million, or 3 cents a share, from the retirement of convertible debt.

Accounting for these two items, Nextel’s net income in the quarter was 55 cents a share.

Revenue rose 29 percent to $3.29 billion in the quarter from $2.56 billion in the year-ago period.

• Telecommunications equipment maker Lucent Technologies Inc. swung into a profit in the third quarter, from a year-ago loss. The results, announced Wednesday, marked its fourth consecutive profitable quarter.

The company also raised its sales outlook, based on an improving telecommunications market.

The Murray Hill-based company had net income of $387 million, or 8 cents a share, for the three months ended June 30. That compared with a loss of $254 million, or 7 cents a share, last year.

Revenue for the April-June quarter was $2.19 billion, up 11.4 percent from the $1.96 billion recorded in the year-ago period.

• Northwest Airlines Corp. reported a smaller-than-expected second-quarter loss of $182 million on Wednesday, amid rising fuel costs and growing pressure to cut labor costs.

For the quarter ended June 30, Northwest said it lost $2.11 per share, compared with a profit of $2.45 per share, or $227 million, a year earlier. The year-ago profit was due to government reimbursement of security fees and the sale of a ticket processing company.

Without a $104 million charge related to parked aircraft and other inventory, Northwest said it would have lost $78 million, or 90 cents per share.

Revenue for the second quarter was $2.87 billion, up from $2.42 billion in the previous year. Analysts had predicted about $2.8 billion.