General Motors posted Friday a whopping 15.5-billion-dollar net loss in the second quarter as the US auto giant took hefty restructuring charges and US sales skidded.
The bleak earnings reported by the largest US automaker coincided with news of a seventh straight month of US non-farm job losses that stoked concerns the economy is nowhere near the road to recovery.
GM said its loss per share in the second quarter was 27.33 dollars, compared with a 1.37 dollar earnings per share in the second quarter of 2007.
But excluding special items, the loss per share was 11.21 dollars, nearly four times the market expectations of 2.63 dollars.
“As our recent product, capacity and liquidity actions clearly demonstrate, we are reacting rapidly to the challenges facing the US economy and auto market, and we continue to take the aggressive steps necessary to transform our US operations,” GM chairman and chief executive Rick Wagoner said in a statement.
The massive quarterly net loss compared with a net profit of 891 million dollars a year earlier.
It reflected 9.1 billion dollars in one-time special charges that ranged from four truck plant closures and employee separation packages to a long strike at parts supplier American Axle and continued losses at its 49 percent owned GMAC Financial Services.
GM has racked up 18.8 billion dollars in the red in the year to date, putting the company on track to repeat its 2007 loss of nearly 39 billion dollars.
“The second quarter this year has been one of the fastest-changing markets I have ever seen,” Ray Young, GM's chief financial officer, said in a conference call with reporters and analysts.
The third quarter began inauspiciously, as well. GM separately reported July US auto sales plunged 26.7 percent from a year ago.
GM shares plummeted 5.79 percent to 10.43 dollars around 1900 GMT in New York.
The sluggish US economy, roiled by the worst housing market slump in decades, financial turmoil and soaring oil prices, has slashed sales of gasoline-guzzling large trucks and sport utility vehicles (SUVs), GM's profitable mainstay, in recent months.
GM has taken drastic measures to adjust to its steady loss of US market share. It has shed tens of thousands of jobs, cut costs and switched some production into the suddenly more desirable fuel-efficient cars and crossovers, SUVs built on car platforms.
The automaker also is considering the sale of its huge gasoline-guzzling Hummer brand.
“We have the right plan for GM, driven by great products, building strong brands, fuel-economy technology leadership and taking full advantage of global growth opportunities,” Wagoner said.
GM said its second-quarter results were primarily driven by “significant losses” in GM North America, where sales volume plunged 20 percent in a “markedly weaker US auto market.”
In North America, net pretax losses nosedived to 9.3 billion dollars from 88 million dollars a year ago.
Revenue for the second quarter was 38.2 billion dollars, down 18 percent from 46.7 billion in the year-ago quarter, mainly due to falling sales in GM North America.
The US sales decline was somewhat offset by sales gains in Europe, Asia Pacific, Latin America, Africa and the Middle East regions that totalled 20.8 billion dollars, up 1.7 billion from the 2007 second quarter.
“On balance, (a) weak set of results, but not as bad as headlines suggest,” said Himanshu Patel, an analyst at JP Morgan.
