GM reports $15.5 billion net loss for Q2 2008

Posted Fri Aug 1 2008 7:50 AM by Alex Kaufmann

General Motors has announced today a $15.5 billion net loss for the second quarter of the year, with declining sales of large pickups and SUVs and $9.1 billion of predominantly non-cash special items largely to blame for the poor result. The other key factors were costs associated with the American Axle and factory strikes, charges related to its U.S. hourly worker buyout program, and actions to reduce North American truck capacity.

The loss equates to $27.33 per share for the second quarter - including all the one-off charges and special items - compared with net income from continuing operations of $784 million or $1.37 per share in the second quarter of 2007. Ignoring these, GM posted a net loss of $6.3 billion or $11.21 per share. This is in stark contrast to a net income from continuing operations of $1.3 billion or $2.29 per share in the same period last year.

Revenue for the second quarter was $38.2 billion, down from $46.7 billion in the year-ago quarter. However, combined revenues for regions outside North America were up more than $1.7 billion over the same period in 2007, registering at $20.8 billion.

In the months leading up to this latest announcement, GM revealed a number of major restructuring plans to respond to the challenges facing the U.S. auto industry and transform its poor North American operations.

Some of those actions include cessation of production at four truck plants, shift reductions at two truck plants, the addition of shifts at two car plants, announcement of the new Chevrolet global small car program and next generation Chevrolet Aveo compact car, introduction of a high-efficiency four-cylinder engine, salary worker job cuts, suspension of dividends, reductions in sales and marketing budgets, a strategic review of the Hummer brand and production funding approval for the Chevrolet Volt plug-in hybrid vehicle.

Ford last week announced an $8.7 billion second-quarter net loss but this was heavily skewed by a pre-tax special charge of $8 billion.

Reader Comments

Fri Aug 1 2008 5:18 PM
worldbfree4me says

From an investment standpoint, I think GM @ $10/share is real good buy as I think GM will return to profitability in about 24-36 months. However, to park say $50k into GM stocks and wait up to 3 years for a return is not the best advice. On the business side, if the all new Malibu and G8 are indications of what to expect from GM in the future, then the future looks bright. But Karma my friend is a mofo, as GM deserves this punishment for fooling me and others into thinking that the Chevy Celebrity Euro Sport I purchased several decades ago was a world beating car. That was the straw the broke the camels back for me.
Fri Aug 1 2008 7:11 PM
HECTOR says

I'm no expert but I have common sense.

GM posted a loss of $39B in 2007 and are now down almost $19B in the first half of 2008. You can't tell me that a company can sustain that kind of bleeding and still be alive. GM is bankrupt whether they know it or not. It's just a technicality that they haven't filed yet.

MotorAuthority