GM Reports Net Loss, Excluding Tax Benefit
Shares of General Motors reversed course in pre-market trading Tuesday after enthusiasm about what looked like a surprise profit waned when the chief exeuctive said it was unlikely analysts knew about a one-time tax benefit.
GM , which jumped 3 percent in Europe just after results were issued, shed 3 percent later in the morning.
GM posted a net loss of $722 million, or $1.28 per share, in the fourth quarter, compared with net income of $950 million, or $1.68 per share, a year earlier. In addition, it announced a buyout plan for 74,000 employees.
"We continue to run right around the break-even line, for a business as big as us," GM chairman and chief executive Richard Wagoner, Jr., told CNBC.
"I think underlying all that, we're doing some good stuff, but we really haven't been able to break out into the kind of earnings and cash flow that we need over time, so we've got some more work in front of us."
(See the full interview in the video below).
GM said it earned $46 million, or 8 cents a share, in the fourth quarter, excluding certain items, down from $180 million, or 32 cents a share, in the year-ago period.
"We've been out of the business of forecasting earnings so we didn't have a prior disclosure on this," he said.
Revenue fell to $47.09 billion, from $50.8 billion in the same quarter a year earlier. But that was higher than the $44.4 billion analysts predicted.
"We don't know yet how many people will take that offer, but we think it's a very good offer," Wagoner said. "It's creative, because it will significantly be funded out of our over-funded pension plan, so, all things considered, it could be a good deal for both workers and for us."
He declined to state a target number for how many workers would accept the deal, but said it is a case where "more is better."
Strong Overseas Earnings
GM was profitable in every region outside North America. GM's Latin America, Middle East and Africa division reported a record $1.3 billion in earnings, up 140 percent from 2006. GM's Asia Pacific division earned $744 million, up from $403 million in 2006, while GM Europe reported a profit of $55 million, down from a profit of $357 million in 2006.
But GM's North American division continued to struggle, posting a $1.5 billion loss for the year, nearly identical to its $1.6 billion loss in 2006. GM's North American division also reported a loss of $1.1 billion in the fourth quarter, compared with a loss of $129 million in the year-ago quarter.
GM's results also were dragged down by its 49 percent stake in GMAC Financial Services, which lost $2.3 billion in 2007. GM reported a $1.1 billion loss attributed to GMAC.
GM barely retained its title as the world's largest automaker in 2007, selling just 3,000 more vehicles than Toyota Motor. GM sold a total of 9,369,524 vehicles worldwide, up 3 percent from the year before.
-- AP and Reuters contributed to this report