updated 1/19/2005 9:50:42 AM ET 2005-01-19T14:50:42

General Motors Corp., the world's biggest automaker, said Wednesday its net income fell 37 percent in the fourth quarter, led downward in part by continued struggles at its European operations.

GM earned $630 million, or $1.11 a share, in the October-December period compared with $1 billion, or $2.13 a share, in the fourth quarter of 2003. Revenue 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 Wall Street consensus was for earnings of 91 cents a share for the latest quarter before special items, according to Thomson First Call.

But global automotive operations were off roughly 40 percent from the fourth quarter of 2003 — $235 million versus $396 million a year ago.

For the year, GM earned $3.7 billion, or $6.51 a share, down from $3.8 billion, or $7.14 a share, in 2003.

Excluding special items, GM's 2004 earnings amounted to $3.6 billion, or $6.40 a share — in line with the company's guidance and above the Wall Street consensus of $6.31 a share. Results included record earnings at its finance arm, GMAC, for the 10th consecutive year and a 12 percent improvement in automotive earnings.

Annual revenue rose 4.5 percent to $193 billion.

"GM reported solid overall results in 2004, despite challenging competitive conditions in many markets around the globe," GM chairman and chief executive Rick Wagoner said in a statement.

GM said approximately 119,000 hourly employees in the United States will receive profit-sharing payments. A typical hourly worker eligible for profit sharing will qualify for a payment of about $195.

In a briefing with analysts last week, GM warned of lower profits this year, in part because of higher health-care expenses and lower anticipated results at its finance arm.

The automaker has set a 2005 earnings target of $4 to $5 per share, excluding special items. The current Wall Street consensus: $4.78.

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