Rising health-care costs and lingering struggles in its European operations helped drive down General Motors' profit by 37 percent in the...

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Rising health-care costs and lingering struggles in its European operations helped drive down General Motors’ profit by 37 percent in the fourth quarter, and the world’s biggest automaker said it expects a rough start this year.

GM officials said yesterday the company expects break-even or better results in the current quarter, reflecting lower vehicle production and sales of less profitable cars and trucks. They expect U.S. vehicle sales to be down slightly in 2005 from robust volume last year.

In a research note, Merrill Lynch analyst John Casesa said GM’s forecast for “break even or better” results in the January-March period led him to lower his full-year prediction to $4 a share from $5.50 a share.

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For the October-December quarter, GM earned $630 million, or $1.11 a share, compared with $1 billion, or $2.13 a share, in the fourth quarter of 2003. Sales rose 4.7 percent to $51.2 billion from $48.8 billion a year earlier.

Excluding special items, GM’s income from continuing operations totaled $569 million, or $1.01 a share, in the most recent quarter, down from $838 million, or $1.47 a share, a year ago.

The consensus forecast of analysts surveyed by Thomson Financial/First Call was for earnings of 91 cents a share before special items for the latest quarter.

Shares of GM, a Dow component, fell 6 cents to close at $36.71 yesterday after rising as high as $37.47 earlier in the session. Its shares are still above their 52-week low of $36.48.


JPMorgan Chase

Bank One deal, bonuses take bite

JPMorgan Chase, the second-largest U.S. bank, said quarterly profit fell 11 percent because of higher-than-expected costs from its $58 billion takeover of Bank One and bigger bonuses to retain investment bankers.

Profit in the fourth quarter dropped to $1.67 billion, or 46 cents a share, from $1.86 billion, or 89 cents, a year earlier, the company said yesterday. Excluding merger expenses, profit would have been 64 cents a share, less than the 68-cent average estimate of 17 analysts surveyed by Thomson Financial/First Call.

Total revenue rose 60 percent to $12.95 billion, less than the $13.38 billion average in the analyst survey.

Bank One’s results helped lift net interest income, or what the bank earned on loans, 67 percent to $5.33 billion from $3.18 billion a year ago.

JPMorgan bought Bank One, the nation’s sixth- largest at the time, to bolster consumer banking and insulate earnings from swings in demand for investment-banking services.

It has $1.16 trillion in assets, surpassed only by Citigroup.

Shares of JPMorgan, one of the 30 Dow industrials, fell 56 cents to $37.84 yesterday.


eBay

Profit strong, Wall St. wanted it stronger

Strong holiday sales caused eBay’s profit to surge 44 percent from a year earlier, and executives raised their outlook for the rest of 2005. But the online auction giant failed to meet Wall Street’s expectations by a penny per share and its stock fell.

One of the world’s largest e-commerce companies, eBay announced fourth-quarter profit yesterday of $205.4 million, or 30 cents a share, compared with $142.5 million, or 21 cents a share in the year-ago period.

Excluding special items, eBay earned $226 million, or 33 cents a share, up from $157 million, or 24 cents a share, a year earlier.

For the three months ended Dec. 31, eBay reported fourth-quarter sales of $935.8 million, up 44 percent from $648.4 million in the year-ago period.

Analysts had expected the San Jose, Calif., company to earn 34 cents a share on sales of $934.17 million.

eBay shares dropped $3.32, or 3.1 percent, to close at $103.05 yesterday before the earnings were released. In after-hours trading, the shares lost $10.07.

eBay also announced a 2-for-1 stock split effective Feb. 16 for shareholders of record Jan. 31.


Pfizer

Cholesterol drug supercharges sales

Pfizer, the world’s largest drug company, said yesterday fourth-quarter profit more than quadrupled, driven by strong sales of cholesterol drug Lipitor and compared with results depressed by bigger charges in 2003.

Excluding certain items, earnings missed analysts’ forecasts, however. Shares of Pfizer, a Dow component, fell 42 cents to $24.88 yesterday, versus a 52-week low of $21.99 in December.

The company, which also makes the anti-depressant Zoloft and the pain reliever Celebrex, said it earned $2.83 billion, or 39 cents a share, for the October-December quarter, up from $602 million, or 8 cents a share, a year earlier.

Before charges and special items, Pfizer’s profit rose 16 percent to $4.39 billion, or 58 cents a share. Analysts surveyed by Thomson Financial/First Call had expected 59 cents a share before one-time items.

Sales rose 7 percent to $14.92billion from $13.98 billion a year earlier.

For the year, Pfizer reported profit nearly tripled to $11.36 billion, or $1.49 a share, from $3.91 billion, or 54 cents a share, a year ago. Excluding various items, its adjusted income grew 31 percent to $16.17 billion, or $2.12 a share.

For the year, sales rose 17 percent to $52.52 billion from $44.74 billion.

Compiled from Bloomberg News and

The Associated Press