Gojirra99

Wednesday, July 26, 2006

GM posts 2Q loss of $3.2 billion due to restructuring costs

Brett Clanton / The Detroit News

General Motors Corp. today reported better-than-expected quarterly results after cutting jobs and improving sales of its highly-profitable SUVs, but still was dragged down in the May-June period by huge restructuring costs.

The world's largest automaker posted an overall quarterly loss of $3.2 billion, or a $5.62-per share, compared with a reported loss of $987 million, or $1.75 per share a year ago in the same period.

GM’s profits were overwhelmed by $4.3 billion in one-time charges, the bulk of which was related to a sweeping buyout and early retirement plan that will eliminate nearly 35,000 hourly jobs by the end of the year.

While the charge overwhelmed any financial gains, it will help GM take a huge bite out of its labor costs in coming years and for that reason was not viewed by analysts as a negative.

Excluding the charges, GM reported a net income of $1.2 billion, or $2.03 per share, on record revenue of $54.4 billion. This reflects a $1.4 billion improvement from the year-ago adjusted loss of $231 million, or $0.41 per share, on revenue of $48.5 billion.

Analysts had expected GM to earn an operating profit of 55 cents per share on $42.6 billion in revenue in the second quarter.

The improved results give some much-needed good news to GM Chief Executive Rick Wagoner, who is under pressure from billionaire investor Kirk Kerkorian to hit better numbers after a $10.6 billion loss in 2005. It could also ease pressure on GM to join an alliance, championed by Kerkorian, with Nissan Motor Co. and Renault SA.

The better performance, which follows a $445 million net income in the first quarter, GM’s first quarterly profit since 2004, suggests a sweeping North American turnaround plan is beginning to bear fruit.

"Our turnaround has not just gained traction, it’s accelerating into high gear," Wagoner said Wednesday in a statement."While significant work still remains, our ability to identify and initiate $9 billion in cost cuts over the course of the past year is unprecedented in this industry."

GM shares have risen more than 50 percent this year on optimism that the company's turnaround plan is starting to work.

GM's shares climbed 99 cents to $30.66 yesterday in New York Stock Exchange trading, the first close above $30 since October.

source : detnews

SoCalSC4

$3.2 billion dollars. That is staggering.

Nice work, fellas. ONLY a $3.2 billion loss this quarter.
At this rate, they'll be profitable again in just a matter of decades!

If GM was a horse, you'd have to shoot it.

Trexus

I would have shot it two quarters ago...

Remember GM lost $10.6 Billion in 2005...

-J-P-L-

Hahaha!


This is just pathetic. GM has no right to still be the world's "largest" automaker.

So what the hell keeps a company going when it's losing a billion bucks a month???
Economics 101 says a company needs to actually turn a profit to survive. That's what
having a business is all about. When was the last time that GM even made a 1 penny profit
by the end of a year?

GRAND_LS 4

iTrader: (2)

yup, a 10 yearold selling lemmon juice on a sunday morning makes more money in one day, then GM does in a year.

Iceman

What I think you're all forgetting is that finally, FINALLY both GM and the market are looking long-term. A $3.2B loss is only staggering if your company doesn't have the deep cash reserves to cover it. And when that loss is a one-time sacrifice to clean literally hundreds of billions of dollars off the future books, it's a really smart decision.

Don't get me wrong, I still think GM is basically a lost cause. But using this quarter's figures to emphasize that point is wrong, in my view.

rominl

iTrader: (4)

like i said in the other thread, good luck, nissan.....

3.2 billion, that's just insane amount of money no matter how you see it, even if it's one time charge. just crazy. if you talk about 30k a car, that's still whopping 107k units..... damn.........

Trexus

I'm sure GM will pull through and survive but they will be much different. As for Toyota they made $11.7 Billion for fiscal year ending March 31, 2006.

http://finance.yahoo.com/q/is?s=TM&annual

Go Toyota!

Trexus

Back in 2005 GM would have had to make $10.6 Billion to break even then on top of that make about another $11.7 Billion just to catch up with Toyota. All in all GM would have to make around give or take a few billions, $22.3 Billion to be on par with Toyota in 2005...

GlobeCLK

iTrader: (5)

maybe GM downsize to about 100 employees and build nothing but Corvettes. That way maybe they can be profitable.

4TehNguyen

iTrader: (1)

i think they base the "largest" designation as the number of cars they produce. If it went by profits toyota is probably #1

SoCalSC4

Okay... when was the last time GM had a profitable quarter? They've been in deep you-know-what for quite some time now. I honestly don't have an answer for when they were last profitable, but in my lifetime GM has never built a car on par with any Japanese car. They continue to turn out boring, uninspired, hodge-podge, re-branded parts bin cars (for the most part).

GM needs to re-evaluate and re-design most of their vehicles, make the vehicles competitive and desireable (you can only get so far selling on price & rebates alone), ditch the Unions, and trim the fat (Buick?). Get 'er done, Lutz!

Wake me up when it's over!

rominl

iTrader: (4)

and one more thing -- build cars that actually last....

Trexus

GM was profitable in the first quarter of this year.

http://finance.yahoo.com/q/is?s=GM

GM still has a long way to go and they're not about to give up...

Lil4X

Yes, they are spending themselves into oblivion more slowly now . . . .

I wish I had their investor relations department . . . making a $3.2 bn loss look like GOOD news! I think we've found the replacement for Siegfried and Roy . . . heck with big cats, these guys can make BILLIONS disappear, and make us pay for the privilege of watching!