Justice Sirikah

General Motors Corporation (NYSE: GM) Announces More-Than-Expected Q4 Loss

by Justice Sirikah February 27, 2009
9gm_logo.pngHot on the heels of a bailout-incited backlash from the lowest price on the bourse in decades, shares of General Motors Corporation (NYSE: GM) dove 5.88 percent in the pre-market trading session in reaction to the company’s announcement of a 2008 fourth quarter and year-end loss. The biggest automaker in the U.S, yet currently under the auspices of tax-payer money, blamed the negative financial results on the ongoing worldwide economic crisis and the subsequent across-the-board breakdown in automobile demand.

  “We expect these challenging conditions to continue through 2009, and so we are accelerating our restructuring actions”, stated G.M chairman and Chief Executive Officer Rick Wagoner.

  For the fourth quarter of year 2008, GM said it posted a resounding net loss of $9.6 billion ($15.71 a share), compared to 2007 Q4 loss from continuing operations amounting to $1.5 billion ($2.70 per share). Minus some expenses GM lost $9.65 a share, $2.25 more than what some Wall Street analysts had predicted. The full year 2008 loss arrived at $30.9 billion ($53.32 per share), an "improvement" from the previous year’s loss of $43.3 billion ($76.52 per share).

  GM’s revenue for the Q4 2008 tumbled to $30.8 billion, from $46.8 billion realised in 2007’s matching period. Full year’s revenue totalled $149 billion, a significant drop from 2007’s full year revenue of $180 billion. $148 billion of the revenue was generated by the company’s automotive enterprise.  $14 billion was accounted for in cash and cash equivalents by year-end 2008, against the year before’s $27.3 billion.

 Altogether, this is reflective of the carmaker’s 2008 global sales which waned by 5 percent to 3.6 million units of vehicles and domestic sales which also shrank by 18 percent to almost 3 million units. Meanwhile, 2007 was the second-best year in terms of units sold in GM’s century of existence with global sales of 9.4 million cars. While it was edged by Toyota Motor Corporation (NYSE: TM Message Board on HotStoked) for the number 1 spot on a global level, GM managed to outsell Toyota on the domestic front by nearly 1.246 million, with 3.87 million vehicles sold.

GM stock ended up selling for $2.38 on February 26, down from $2.55 the previous trading session. Toyota was the biggest looser following the news that it intends to cut down annual output for fiscal year 2009 by 10 percent to 6.3 million vehicles beginning in April. The carmaker also reported a 39.1 percent reduction in its January’s global production to 487, 984 cars. The firm’s share price closed down at $62.60, from the preceding day’s $65.54.

1. http://www.gm.com/
2. http://www.toyota.co.jp/en/index.html

Comments 0

Type the characters that you see in the box (5 characters).