General Motors Corp. , the world's largest automaker, said Monday it raised its estimates for 2002 first quarter and full-year earnings and production schedules, citing better-than-expected industry sales in the United States and strong retail sales of GM vehicles.

GM's outlook for first quarter earnings per share is now $1.20, excluding its Hughes Electronics Corp. unit and any special charge related to GM's ongoing restructuring of its European operations. Previously, GM's estimate for the first quarter, excluding Hughes and any European restructuring charge, was $1.00 per share.

GM's revised estimate for full-year 2002 is now $3.50 per share, excluding Hughes and any European restructuring charge. The increase of 50 cents from the previous estimate is mostly attributable to expected increases in production volume to meet better-than-expected retail vehicle demand in the United States, the company said in a news release.

GM Vice Chairman and Chief Financial Officer John Devine said the revised outlook comes as GM is taking steps to strengthen its balance sheet by $10 billion this year through a combination of improved cash flow, dividends from its financing subsidiary GMAC stemming from its anticipated earnings strength, proceeds from the proposed split-off and merger of Hughes, and public offerings.

GM also said it plans to offer $2.5 billion in convertible debt securities as part of a comprehensive effort to improve the company's financial flexibility.

The securities mature in 30 years and are convertible into GM $1-2/3 common stock. Pricing of the securities is expected to occur later this week.

GM said proceeds will be used to rebuild its liquidity position, reduce its underfunded pension liability, and fund its post-retirement health care obligations.

Devine said the long-term outlook for GM is increasingly positive.

"It is reasonable to expect that GM could generate $10 per share in earnings by the middle of the decade," he said.

He said GM expects to achieve this earnings target through a combination of aggressive cost-cutting, improved volume and mix in North America, improved earnings in Europe, Asia and Latin America, and solid financial performance from GMAC.

In January, GM said it would cut by about 10 percent its white collar and contract employees in North America. It also announced job cuts in Europe.

As a result of this stronger industry sales outlook and GM's performance in the retail market, GM said it is increasing its first quarter North American production estimate by 20,000 vehicles, to 1,340,000 units. This would be 10 percent above last year's first quarter production of 1,214,000 vehicles.

For the second quarter of 2002, GM said it estimates that its North American production will be about 1,425,000 units (605,000 cars and 820,000 trucks), up over 4 percent from 1,364,000 units last year. GM's North American production for the first half of 2002 will be up 187,000 units, or 7 percent, compared to last year.

For the full year, GM said it expects to produce more than 5.1 million vehicles in North America, up more than 100,000 units from the company's estimate in January.

Ford Motor Co. , the world's second largest automaker, has been taking steps to return to profitability this year after posting in 2001 its first full year loss since 1992. And DaimlerChrysler AG's Chrysler unit hopes to break even this year after posting a loss of $1.14 billion in 2001.