GM says it lost US$1.2bn in the third quarter after its July 10 exit from Chapter 11 bankruptcy in the US and said it would repay government loans early.
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After the inclusion of special items, GM’s managerial earnings before tax for the July 10-Sept. 30 period was a loss of US$1.0bn. GM recorded special items for the same period of US$505m, attributed primarily to dealer restructuring, attrition-related charges and Delphi. For the July 10-Sept. 30 period GM posted a managerial loss after-tax of US$1.2 billion.
GM, 61 percent owned by the U.S. government, said its operations generated US$3.3 billion in cash and ended September with US$42.6bn on hand. Repayment of US and Canadian government loans will start this quarter, GM said.
“We have significantly more work to do, but today’s results provide evidence of the solid foundation we’re building for the new GM. With a healthier balance sheet and a competitive cost structure, our focus is on driving top line performance. We’ll achieve that by winning customers over, one at a time, with vehicles that deliver performance and value,” said GM President and CEO Fritz Henderson.
The results were unaudited, according to GM, which reported data for July 1 through July 9, for the pre-bankruptcy GM, and for the period since July 10. Revenue was $28 billion for the full three months, GM said.
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By GlobalDataThe financial results were not prepared according to generally accepted accounting principles and were not directly comparable to past results for the automaker.
GM said it finished the third quarter with US dealer inventories of approximately 424,000 vehicles; a reduction of approximately 158,000 units from the end of the second quarter.
GM highlighted strong US retail sales of some of its newest vehicles, including the Chevrolet Camaro, GMC Terrain, Chevrolet Equinox, Buick LaCrosse and Cadillac SRX which it said are ‘generating higher average transaction prices and higher residual values than previous model year vehicles’.
In other markets around the world, GM said strong sellers included the Holden and Chevrolet Cruze, Daewoo Matiz Creative, Opel/Vauxhall Astra and Chevrolet Agile.
GM also said that the booming China market is proving to be a strong contributor for the company’s results.
GM and its joint venture partners sold more than 478,000 vehicles in the third quarter of 2009, up from approximately 451,000 and 364,000 units in the second and first quarters, respectively.
Globally, GM expects total vehicle industry volume to moderate in the fourth quarter of 2009, with an estimated SAAR to be approximately 65.4 million units, down from 67.8 million units in the third quarter. Following the expiration of the successful ‘Cash for Clunkers’ stimulus program in the U.S. which contributed to GM’s strong sales in the third quarter, the company anticipates the U.S. industry total vehicle SAAR volume in the fourth quarter will be approximately 10.7 million units, compared to 11.7 million units in the third quarter.
Looking ahead to 2010, GM anticipates modest growth, with total industry volumes estimated at 62 to 65 million units, with a modest recovery in the U.S. market where the outlook for the 2010 calendar year for total vehicles is estimated at 11-12 million units.
GM expects to have negative net cash flows in the fourth quarter of 2009 due to a number of factors including cash outflows relating to the Delphi settlement of US$2.8 billion, the working capital impact of payment term adjustments of approximately US$2 billion, payments for U.S., Canada, Ontario and Germany government loans of approximately US$2.5 billion and continuing restructuring cash costs of approximately US$1 billion. As a result, global cash balances at the end of 2009 are expected to be materially lower than third quarter levels of US$42.6 billion.
