GM Loses $4.8B in 4th Quarter

[findthisfunny]

DETROIT - General Motors Corp. lost $4.8 billion, or $8.45 per share, in the fourth quarter of 2005, dragged down by losses in its North American division. The automaker also said Thursday it lost $8.6 billion, or $15.13 per share, in all of 2005.
ADVERTISEMENT

GM's fourth-quarter loss compare to a loss of $99 million, or 18 cents per share, in the October-December period of 2004.

Revenue was $51.2 billion for the quarter, down slightly from $51.4 billion a year ago.

Full-year revenue was $192.8 billion, down slightly from $193.5 billion in 2004.


story continues here:
http://news.yahoo.com/s/ap/20060126/...bi_ge/earns_gm

[findthisfunny]

Wow that is a staggering loss!

[mgescuro]

Staggering loss.
And that should bring GM's cash reserve to about $10B.
OUCH

[tgagneguam]

Gosh, it would take a lot of money to erase that loss. About as much money as Toyota made last year, in fact.

Weak performance, Rick.

[BigBadBflo]

Thats what happens when you fire sale all of your vehicles.

It may be nice to claim "best selling" this or that, but when the financial results of above are revealed, the claim is just frosting on a stale cake.....

[tgagneguam]

Ahh, the full press release on GMMediaOnline explains it better:

...GM reported a loss of $1.2 billion, or $2.09 per diluted share in the fourth quarter of 2005, excluding special items. These results compare to adjusted earnings of $726 million, or $1.28 per share in the year ago period. Revenue was $51.2 billion compared to $51.4 billion a year ago.

Including special items, GM reported a loss of $4.8 billion, or $8.45 per diluted share in the fourth quarter of 2005, compared to a loss of $99 million, or $0.18 per share in the fourth quarter of 2004.

The reported results for the fourth quarter of 2005 include special items totaling $3.6 billion after tax, or $6.36 per diluted share. These items are primarily attributable to an after-tax restructuring charge of $1.3 billion at GM North America and a preliminary after-tax charge of $2.3 billion associated with the UAW/Delphi benefit guarantee. Additional details on the special items are included below and in the “Highlights” section of the press release...

and

...Cash, marketable securities, and readily-available assets of the Voluntary Employees’ Beneficiary Association (VEBA) Trust totaled $20.5 billion at Dec. 31, 2005, up from $19.2 billion on Sept. 30, 2005. This excludes GMAC’s cash reserve balances of approximately $20 billion at Dec. 31, 2005. GM withdrew approximately $1.2 billion from the VEBA Trust in the fourth quarter of 2005.

In October of 2005, GM estimated that its contingent exposure relating to the benefit guarantees for certain former GM U.S. hourly employees who transferred to Delphi, ranged from zero to $12 billion. GM now believes that the range is between $3.6 billion and $12 billion with amounts closer to the low-end of the revised range considered the company’s best estimate assuming an agreement is reached between GM, Delphi and its unions...

are two examples.

[msupete]

hopefully that 4.8B loss incorporates a lot of one time costs like Delphi bailouts and such. They (again, hopefully) maybe realized they were going to have a crappy loss this quarter so they just piled on a bunch of one time costs to just get it done at once. kinda like pulling a bandaid off really quick, I would be curious to see how much the loss would be if you just considered just the fixed costs. maybe that picture is a little less bleak, either way, I can't wait till this is over and American car companies can become competitive from a financial standpoint again

[boblutzfan]

Now is the time to buy GM stock.

[Sal Collaziano]

Well. At least they sold a lot of automobiles with all the discounts this year..

[D C]

All they did is pile on losses for '05. Why not? '05 is shot financially. Might as well make it look REALLY bad so you can pat yourself on the back when you remarkably turn things around in '06.

Of the 8.6 billion, a LOT of it was charges for one thing or another.

[Randle2I]

Wow. I really cant say I'm surprised though. With the employee pricing deal and all the red tag sales on top of their new pricing stratagy they've been loosing money on every car they sale. The only thing we can hope to gain from this loss is a new perspective on Waganer & Co's part that they need to stick to their guns with this new pricing scheme, up quality, and start bringing out GREAT products.

[paul3230]

Originally Posted by BigBadBflo

Thats what happens when you fire sale all of your vehicles.

It may be nice to claim "best selling" this or that, but when the financial results of above are revealed, the claim is just frosting on a stale cake.....

Well, GM needs to claim what ever they can to prop up sales..but the sad thing is that this just can't continue. You can't lose 5 billion dollars in a freakin' quarter and expect to survive too much longer. GM had what, 14 or 15 billion in cash reserves before this? So what...three more quarters of this and GM will be looking really bleak. Chapter 11 may be unavoidable by the end of this year

[Gixx]

Originally Posted by D C

All they did is pile on losses for '05. Why not? '05 is shot financially. Might as well make it look REALLY bad so you can pat yourself on the back when you remarkably turn things around in '06.

Of the 8.6 billion, a LOT of it was charges for one thing or another.

Exactly correct, if you are going to $hit the bed, why not do it all at once. Smart move by Rick and the crew. Wall Street usually sees through this, but the general public won't remember this come Jan 2007 when the financials look much rosier.

[bone]

Oh my gosh. How much longer can this go on? GM must de-emphsize market share by reducing product. I would much rather see GM with 20% market share and being profitable. How many lines does GM need? Chev, Pontiac,Cadillac,and perhaps GMC.

[VibenPontiac]

Easily the smartest move as noted already - expense the one time losses on factory closures now and get better looking results when they actually incur those cash expenses. Very smart - oh my god - did I just call Wagoner smart!!!