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GM Earnings: When The Good News Is NOT So Good

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CNBC.com

When is a positive earnings surprise actually a a doozy of a loss? When it's General Motors fourth quarter earnings. Confused? You aren't alone. Let me explain.

GMreported adjusted fourth quarter earnings of $46 million dollars or 8 cents a share. On the surface that's a huge upside surprise over the street estimate of GM losing 54 cents a share.

But GM's upside surprise includes a tax benefit of $1.6 billion dollars. It's the kind of surprise almost no one outside of the company could have predicted. By my calculations, if you strip out that tax benefit GM posts an adjusted loss of $2.77 a share.

Want more confusion?

GM says it's not accurate to look at the benefit as a straight earnings per share benefit, so it would be incorrect to say the company lost more than $1.5 billion in the 4th quarter.

So what do you make of all this? Clearly the 4th quarter was a rough one for GM, with the company losing $1.1 billion in North America--largely because of weaker sales in the U.S.

GM Chairman and CEO told me this morning that he believes GM is on track to eventually get back to profitability in North America. When? He can't say. After the 4th quarter, GM is still spinning its wheels trying to get its business here in the U.S. back on track.