GM (GM) Earnings: US And Emerging Markets Are Bad, Cash Gets Low

By Douglas A. McIntyre Updated Apr 27, 10:12PM EDT · Published Nov 7, 11:33AM EST

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Gm20jpeg20image 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

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.