The chief financial officer of General Motors Acceptance Corp., General Motors Corp.'s finance arm, says he expects the division to earn at least $2.5 billion in 2005.
GMAC Executive Vice President Sanjiv Khattri reaffirmed GMAC's previous full-year guidance Monday at an investor reception in London, according to documents filed with the U.S. Securities and Exchange Commission.
Khattri said he expects net income from GMAC's financing operations to fall this year while income from its mortgage and insurance operations will be up, the result of GMAC's efforts to diversify its portfolio. Auto financing accounted for 77 percent of GMAC's income in 2002 but fell to 47 percent last year.
GMAC earned a record $2.9 billion in 2004, up from $2.8 billion in 2003. Khattri said 2005 will be more challenging, since Standard & Poor's Ratings Services and Fitch Ratings lowered GM and GMAC's debt to "junk" status in May.
Khattri said GMAC expects to pay $2 billion in dividends to GM this year. GMAC has been a significant source of income in recent years for the automaker, which lost $1.1 billion in the first quarter of this year.
GM shares were up $1.12, or 3 percent, to close at $35.80 on the New York Stock Exchange.