General Motors Corp. (NYSE: GM) is trading down sharply after disclosing huge charges last night and after posting a net loss from operation that appears much wider than estimates.Unfortunately, core operations too were still at a loss. Excluding special items, GM had a 2007 third-quarter adjusted net loss of $1.6 billion, or $2.80 per diluted share, compared to net income of $497 million, or $0.88 per diluted share, in the year-ago quarter. The auto giant posted $43.1 billion in quarterly revenues. If you trust the estimates, First Call estimates called for a loss of $0.11 per share on $40.28 billion in revenues.
GM noted that ongoing challenges in the U.S. mortgage market are impacting GM income from GMAC. The company is recording a $39 billion allowance on deferred tax assets and the net loss for the quarter after write-downs and charges is actually larger than the entire stock price, although the company is also claiming that its liquidity position improved to $30 billion. GM also noted that it reached a record high in global sales, but in light of the wide losses, that seems to be a small comfort now.
Shares are down 8% pre-market at $33.25; the 52-week range is $28.49 to $43.20. You'd have to be named Dr. Pangloss to find any great news here this morning. Shares of Ford Motor Co. (NYSE: F) are also trading down ahead of its earnings report tomorrow, although its shares are "only" down by 2%.
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Reader Comments (Page 1 of 1)
11-15-2007 @ 1:37AM
Douglasguru said...
They lose money on every sale, but they are making up for it in volume, LOL. The unions have destroyed the big 3.
11-07-2007 @ 10:22AM
V.S. said...
I am putting my money on GM to increase in value over the next three months while the new contract takes affect. The 4 year wage freeze, buy-outs and new hires at 1/2 the hourly wage will greatly improve the companies end of the year earnings ratio. Core suppliers will enjoy the same improvement that comes with the wage freeze as they too can lcok in long term contracts with their suppliers. I'm still optomistic that GM stocks will get to $50-$56 by the end of the year....Look for GM to increase their dividends now that the write-downs and contract has/is taking affect....(.50 cents for common).............
11-07-2007 @ 12:18PM
joel said...
kind a funny all the peoples blaming the unions for the downfall of of the big 3 . there is only one guilty party here the management which has ignored the market demand.amc jeep survived thanks to the union owned Renault {who in turned also bailed out Mack truck only to dump them after seing the Great American management philosophy ,they in turn bought out a major share into volvo truck which are now taking over the us trucking industry and bought a major stake in nissan ,not a major player in the USA but very much in asia china south america and africa , Chrysler with daimler , ford is hanging by the tip of their finger nails thanks to ford europe and union plants , with 5 weeks vacations 40 hours week full medical and retirement and the euro is doing darn well .
POOR MANAGEMENT SANK THE BIG 3 NOBODY ELSE .
11-07-2007 @ 7:08PM
Jerry Sombati said...
not poor management, greedy CEOs even as bad as they are now, US CEOs still make twice as much as a CEO from a foreign firms, as yes the innorgrant ones who blame the unions, well what else wold you expect from people who have no brains, they would jump over the bridge if the boss told them too.
11-08-2007 @ 1:34AM
Chevyron said...
The Big 3 have been run by the wrong CEO's for over 2 decades.These Ceo's do not know the business they are in,their markets and the markets their companies repeatedly miss.This is why customers do not get the products that they ask for from the Big 3 and why the unions have bent over backwards to save these companies by the concessions that had been made over the past 3 decades.New low paid workers will no longer be able to retire and are more likely to end up being worked to death before they could possibly qualify.