Trading in GM’s (GM) shares was halted just before earnings came out. They may want to keep trading on hold for a year or two and keep the stock from going to zero. The company’s cash position eroded over the course of the quarter to $16.2 billion from $21 billion.
For the third quarter, revenue fell $5.8 billion to $37.9 billion. A key measurement of the company’s performance, operating cash flow, showed a loss of $6.9 billion compared with a negative $2.5 billion in the same quarter last year.
GM reported a net loss of $2.5 billion, or $4.45 per share, for the third quarter, including special items. That compares with a net loss from continuing operations of $42.5 billion, or $75.12 per share, in the third quarter of 2007, which included a non-cash charge of $38.3 billion to establish a valuation allowance against some of the company’s net deferred tax assets.
On an adjusted basis, GM posted a net loss of $4.2 billion, or $7.35 per share, compared with a net loss from continuing operations of $1.6 billion or $2.86 per share in the same period last year.
GM lost $2.3 billion in the US on revenue of $22.5 billion. In Europe, it lost $974 million on sales of $7.5 billion, down from $8.8 billion last year.
GM Asia, which should be doing remarkably well, did not. Revenue fell from $5.3 billion to $4.8 billion and the unit lost $6 million down from a profit of $186 million.
GM Latin America did remarkably well. The car company should sell all its other businesses and just operate there. Revenue rose to $5.7 billion for the quarter from $4.9 billion. Net was $514 million, up from $374 million.
Cash, marketable securities, and readily available assets of the Voluntary Employees’ Beneficiary Association (VEBA) trust totaled $16.2 billion on September 30, 2008, down from $21.0 billion on June 30, 2008.
Money is getting tight.
Douglas A. McIntyre