General Motors (GM) reported a net loss of $3.2 billion, or $5.62 per share this morning. This figure included one time charges for writing down announced costs associated with buyouts for almost a third of its factory employees. Excluding charges, GM posted a profit of $2.03 per share which easily topped estimates of $0.55 by analysts polled by Thomson Financial.
Total revenues for the second quarter rose to $54.4 billion from $48.5 billion as revenue from auto sales rose 11 percent to $45.2 billion from $40.4 billion. The company stated that global automotive operations, excluding charges, posted their first profit excluding charges since 2004.
GM has been enjoying a great year so far, mostly resulting from the massive reduction in it's workforce. But the company realizes that it needs to do more than just cut costs to keep the good times rolling.
"We know we have to develop and build great cars and trucks to grow our business and we're encouraged by the recent success of our newest vehicles, particularly in the U.S. market," GM Chairman and Chief Executive Rick Wagoner said. "Our newly launched vehicles will account for about 30 percent of our U.S. retail sales this year and grow to 40 percent next year."
Shares of the stock are currently trading up 5.0% in the pre market to $32.18 and since the beginning of 2006 the stock has traded up 69.3%. Not too bad for a year where the DOW is up 3.6% and the S&P is up 1.6%.
Here is a look at what the stock has done during 2006:
Whether or not GM is able to continue it's recent success remains to be seen. The company announced that it raised its target for cutting recurring costs in North America by $1 billion to $6 billion by the end of 2006. Also, a potential deal between GM and Renault/Nissan could be in the works which GM's largest shareholder, Kirk Kerkorian, has stated he believes would be of great benefit to General Motors.
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