GM posts $39 billion third-quarter loss

Source: Manufacturing Digital

Date :07/11/2007 17:17:11

General Motors has reported a record quarterly loss of $39 billion (£18.5 billion), due almost entirely to a huge non-cash charge.

Despite the charge, G.M. said it lost $1.6 billion, or $2.80 a share, in the third quarter compared with a profit of $497 million, or 88 cents a share, in the period a year earlier, excluding items.

GM said it was taking the charge because it had accumulated billions of dollars in potential tax credits in the US, Canada and Germany.

Until last week, many analysts had expected the automaker to post a small profit for the third quarter.

Although an unexpectedly loss at its financing arm, GMAC Financial Services, prompted many analysts to cut their estimates, predicting that GM would post a loss.

Gloomy outlook

G.M.’s third-quarter loss comes amid expectation that auto sales, which are on track for their lowest industry-wide total in almost a decade at about 16 million units, will fall further in 2008.

“The company faces more challenging near-term automotive market conditions in the US and Germany," GM said.

To add to the gloomy outlook, rival automaker Ford expected to post a loss of about $1 billion when it posts its results tomorrow.

Following the news, GM shares fell 4.9 percent during morning trading in New York.

November 7 2007