General Motor’s First Quarter Report Card
General Motors has faced a substantial net loss in the first quarter of 2008, amounting to $3.25 billion dollars. A chunk of this loss comes from the one time charge for its suffering financier GMAC and also for the on going problems it is having with Delphi Corp. Compounded by the fact that America is in the midst of a terrible economic slowdown, GM’s troubles seems to show no signs of wearing off, what with problems with suppliers American Axle facing union troubles for two of the three months of the quarter.
GM has posted over-all revenue of $42.7, which is only marginally below last year’s total of $43.4 billion for the same quarter. However, the net loss for the first quarter in 2007 was only $42 million, a whole fortune less than the losses faced this year.
GM has reportedly taken a $1.45 billion impairment charge for its 49% stake in GMAC. An additional $731 million were spent on non-cash charges for supporting Delphi’s bankruptcy restructuring. This accounts for a bulk of their losses. The two month strike at American Axle has cost GM $800 million. The company has already announced a slow down in production of the slow selling SUVs and trucks to cut further losses.
Excluding the one time charges that GM was forced to make, the company has lost $350 million, that is, 62 cents per share.
GM however has enjoyed profits outside North America, riding on the emerging markets in China, Russia, Brazil and India. It made a combined gain of $1 million in Europe and Asia, among other regions. The new trend is amply illustrated by the fact that though GM’s sales were down only 1% compared to last year, standing at 2.25 million vehicles currently, a whopping 64% of these sales have been made outside the U.S.
The adjusted automotive earnings for G.M. stand at $392 million, which is up $161 million.
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