GM posts $323 million loss
Thursday, April 20, 2006
GM posts $323 million loss
It's the automaker's 6th straight unprofitable quarter.
Dee-Ann Durbin / Associated Press
DETROIT -- General Motors Corp. reported a first-quarter loss of $323 million Thursday, the sixth straight quarterly loss for the world's largest automaker.
The loss of 57 cents per share for the January-March period was narrower than a loss of $1.3 billion, or $2.22 per share, in the first quarter of 2005.
GM said revenues were up 14 percent to a record $52.2 billion from $45.8 billion a year ago, thanks in part to strong sales in Asia and Latin America, the sale of a stake in Suzuki Motor Corp. for $317 million and improvements in North America, including better pricing."
The first quarter represented an important milestone in GM and GM North America's turnaround," GM Chairman and Chief Executive Rick Wagoner said in a statement.GM shares rose 68 cents, or 3.3 percent, to $21.25 in premarket trading.
The automaker, which lost $10.6 billion in 2005, is in the midst of a major restructuring that calls for cutting 30,000 jobs by 2008.
Included in the first-quarter results was a one-time pretax charge of $1 billion in for expenses related to a recent settlement that requires hourly retirees to pay more for their health care. GM must contribute $3 billion to a fund for retiree health care by 2011.
GM's struggling North American division reported a loss of $946 million, compared with a loss of $1.5 billion a year ago. GM Chief Financial Officer Fritz Henderson said cost savings from the health care agreement and from employee buyouts will largely be seen after July 1, but the automaker is optimistic about its results. Henderson said GM is on track to meet its goal of $4 billion in cost reductions by the end of this year."
It's a quarter of good, solid progress," he said. "Obviously, the job's not done."GM's financial arm, General Motors Acceptance Corp., earned $605 million for the quarter, down from $728 million a year ago because of lower mortgage earnings. GM recently completed an agreement to sell 51 percent of GMAC to an investor group for $14 billion.
GM hasn't provided earnings guidance since last April, and Henderson said the company has no plans to provide guidance until it reaches a resolution with auto supplier Delphi Corp. over wages and other issues.
Delphi, GM's former parts division and largest supplier, wants to lower hourly workers' wages and has asked a federal bankruptcy court to throw out its union contracts. Delphi, GM and the United Auto Workers union are in talks about a wage deal that could include payments from GM to supplement wages.
Henderson said the three parties are continuing to talk and he is confident they will reach a resolution without a strike, which could be devastating for GM."
A work stoppage doesn't benefit anybody," Henderson said.
GM posts $323 million loss
It's the automaker's 6th straight unprofitable quarter.
Dee-Ann Durbin / Associated Press
DETROIT -- General Motors Corp. reported a first-quarter loss of $323 million Thursday, the sixth straight quarterly loss for the world's largest automaker.
The loss of 57 cents per share for the January-March period was narrower than a loss of $1.3 billion, or $2.22 per share, in the first quarter of 2005.
GM said revenues were up 14 percent to a record $52.2 billion from $45.8 billion a year ago, thanks in part to strong sales in Asia and Latin America, the sale of a stake in Suzuki Motor Corp. for $317 million and improvements in North America, including better pricing."
The first quarter represented an important milestone in GM and GM North America's turnaround," GM Chairman and Chief Executive Rick Wagoner said in a statement.GM shares rose 68 cents, or 3.3 percent, to $21.25 in premarket trading.
The automaker, which lost $10.6 billion in 2005, is in the midst of a major restructuring that calls for cutting 30,000 jobs by 2008.
Included in the first-quarter results was a one-time pretax charge of $1 billion in for expenses related to a recent settlement that requires hourly retirees to pay more for their health care. GM must contribute $3 billion to a fund for retiree health care by 2011.
GM's struggling North American division reported a loss of $946 million, compared with a loss of $1.5 billion a year ago. GM Chief Financial Officer Fritz Henderson said cost savings from the health care agreement and from employee buyouts will largely be seen after July 1, but the automaker is optimistic about its results. Henderson said GM is on track to meet its goal of $4 billion in cost reductions by the end of this year."
It's a quarter of good, solid progress," he said. "Obviously, the job's not done."GM's financial arm, General Motors Acceptance Corp., earned $605 million for the quarter, down from $728 million a year ago because of lower mortgage earnings. GM recently completed an agreement to sell 51 percent of GMAC to an investor group for $14 billion.
GM hasn't provided earnings guidance since last April, and Henderson said the company has no plans to provide guidance until it reaches a resolution with auto supplier Delphi Corp. over wages and other issues.
Delphi, GM's former parts division and largest supplier, wants to lower hourly workers' wages and has asked a federal bankruptcy court to throw out its union contracts. Delphi, GM and the United Auto Workers union are in talks about a wage deal that could include payments from GM to supplement wages.
Henderson said the three parties are continuing to talk and he is confident they will reach a resolution without a strike, which could be devastating for GM."
A work stoppage doesn't benefit anybody," Henderson said.
posted by Walking Contradiction at 1:31 PM
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