GM's 1st Quarter Results for 2006 are in

[4gm]

DETROIT - General Motors Corp. reported a first-quarter loss of $323 million Thursday, the sixth straight quarterly loss for the world's largest automaker.

The loss of 57 cents per share for the January-March period was narrower than a loss of $1.3 billion, or $2.22 per share, in the first quarter of 2005.

GM said revenues were up 14 percent to a record $52.2 billion from $45.8 billion a year ago, thanks in part to strong sales in Asia and Latin America and improvements in North America, including better pricing.

"The first quarter represented an important milestone in GM and GM North America's turnaround," GM Chairman and Chief Executive Rick Wagoner said in a statement.

GM shares rose 68 cents, or 3.3 percent, to $21.25 in premarket trading.

The automaker, which lost $10.6 billion in 2005, is in the midst of a major restructuring that calls for cutting 30,000 jobs by 2008.

Included in the first-quarter results was a one-time pretax charge of $1 billion in for expenses related to a recent settlement that requires hourly retirees to pay more for their health care. GM must contribute $3 billion to a fund for retiree health care by 2011.

GM's struggling North American division reported a loss of $946 million, compared with a loss of $1.5 billion a year ago. GM Chief Financial Officer Fritz Henderson said cost savings from the health care agreement and from employee buyouts will largely be seen after July 1, but the automaker is optimistic about its results.

"It's a quarter of good, solid progress," he said. "Obviously, the job's not done."

GM's financial arm, General Motors Acceptance Corp., earned $605 million for the quarter, down from $728 million a year ago because of lower mortgage earnings. GM recently completed an agreement to sell 51 percent of GMAC to an investor group for $14 billion.

http://news.yahoo.com/s/ap/earns_gm;_ylt=A...zkxBHNlYwN0bQ--

North American lost almost 1 billion dollars. That's terrible. But if it wasn't for the $1 billion one time charge, GM would have made money for the quarter.

Edited April 20, 2006 by 4gm

[bowtie_dude]

North American lost almost 1 billion dollars.  That's terrible.  But if it wasn't for the $1 billion one time charge, GM would have made money for the quarter.

Indeed, which is very uplifting, for me anyway.

BTW, if GM reported a LOSS why did its shares go up?

Edited April 20, 2006 by bowtie_dude

[ZL-1]

Indeed, which is very uplifting, for me anyway.

BTW, if GM reported a LOSS why did its shares go up?

Because the markets were expecting a bigger loss.

[bowtie_dude]

Because the markets were expecting a bigger loss.

Ah, well then hooray!

[Mr.Krinkle]

last years first quarter loss was more than 5 billion. its not great but somethings starting to give.

21 new cars on the way. this is just beginning to heat up.

wagoner was on the tv this morn, bloomberg i believe, he made note during the interview that the competition is raising incentives while gm is lowering them.

he mentioned nihsen (nissan) he says it like that evidentally...i dont know if thats the actual procunciation or not but went on to say short term that might hurt some sales but the long term ends will justifyt he means. (paraphrase).

the stock opened up 83 cents this morn too. its early but maybe the corner isnt too far away.

[evok]

last years first quarter loss was more than 5 billion. its not great but somethings starting to give.

Not true. GM Corp. according to the 10K filed last month lost 1.2B in the 1Q05.

[Mr.Krinkle]

uh-oh. thats what the tv show said this morn, looked at it as a good thing...not that i dont take your word but ill check it out.

[bowtie_dude]

Not true.  GM Corp. according to the 10K filed last month lost 1.2B in the 1Q05.

Well, bringing that down 75% is still a good thing, at least from my perspective.

[Mr.Krinkle]

you are absolutely correct (as im sure you know) i misheard the the report but here is the opening paragraphs from bloomberg site. my bad.

April 20 (Bloomberg) -- General Motors Corp. reported a smaller first-quarter loss than analysts expected as it trimmed losses in North American auto operations and had a profit in Europe. Shares of the world's largest automaker rose.

GM's sixth straight quarterly net loss narrowed to $323 million, or 57 cents a share, from $1.25 billion, or $2.22, a year earlier. The Detroit-based company said today that it would have reported a profit of 26 cents a share excluding costs for setting up a health-care fund, compared with analysts' estimated loss of 44 cents. Revenue rose 14 percent to $52.2 billion.

``It's kind of ironic to call a $300 million loss a good quarter, but it is a step in the right direction,'' said Kevin Tynan, an analyst at Argus Research in New York who rates GM shares a ``sell'' and doesn't own any. ``You have to be pretty optimistic about the rest of the year.''

all in all not too shabby still.

[enzl]

Most significant is the increased income (and transactional prices) for what was sold....they need revenue to dig out of the hole they're in, and this performance bodes well for the '06 year, however, the Delphi matter could throw a monkey wrench into all of this...

It's definitely quarter to quarter right now...let's hope that gas prices (over $3/gallon in the Northeast and Cali) don't become an issue....

[Mr.Krinkle]

with the hybrids on the way and the ethanol campaign--- the higher gas prices just might not be such bad thing for sales.

[Drew Dowdell]

Indeed, which is very uplifting, for me anyway.

BTW, if GM reported a LOSS why did its shares go up?

They lost 10 billion last year and the markets adjusted GM's stock price to reflect that.

GM lost $323 million in first quarter this year.... losing money at a rate much slower then 2005.

They also had record revenues... so sales are going up. Once they can get their costs under control, they'll be very profitable again. I've been buying GM stock every month since it tanked just before Kirk started buying in. $20 a share for GM stock is a steal! Once they're profitable again, the stock will rise back to it's previous levels or higher.

[bowtie_dude]

They lost 10 billion last year and the markets adjusted GM's stock price to reflect that.

GM lost $323 million in first quarter this year.... losing money at a rate much slower then 2005.

They also had record revenues... so sales are going up.  Once they can get their costs under control, they'll be very profitable again. I've been buying GM stock every month since it tanked just before Kirk started buying in. $20 a share for GM stock is a steal!  Once they're profitable again, the stock will rise back to it's previous levels or higher.

Yeah, I think I'm going to buy some stock myself.

[Drew Dowdell]

``It's kind of ironic to call a $300 million loss a good quarter, but it is a step in the right direction,'' said Kevin Tynan, an analyst at Argus Research in New York who rates GM shares a ``sell'' and doesn't own any. ``You have to be pretty optimistic about the rest of the year.''

all in all not too shabby still.

Rates GM a sell? Why would you do that? GM stock has no where to go but up. Last I looked, their market valuation was less then their net assets.... which is just because people are scared they'll declare bankrupcy.

This is why we don't listen to analysts folks.

[enzl]

Rates GM a sell? Why would you do that? GM stock has no where to go but up. Last I looked, their market valuation was less then their net assets.... which is just because people are scared they'll declare bankrupcy.

This is why we don't listen to analysts folks.

You're not accounting for the Dephi situation and a looming strike...the reason its this low is because of risk, not value of its current assets...

If delphi strikes and production is severely interupted (think months), GM will burn through its liquid assets in a matter of months....

The market has done the same to Ford, as I believe they are sitting on more cash alone than the stock market valuation.

[Guest buickman]

Indeed, which is very uplifting, for me anyway.

BTW, if GM reported a LOSS why did its shares go up?

<{POST_SNAPBACK}>

Volume and price rise quickly in the very near term when short sellers cover their positions. Look for the stock to return to normal when this market activity subsides. Glee over a few hours of upticks is a recipe for slaughter of those who buy on speculation and misinformation.

Buickman

Edited April 20, 2006 by buickman

[thegriffon]

Not true.  GM Corp. according to the 10K filed last month lost 1.2B in the 1Q05.

Today's release says 1.3 billion, after rounding of course.

[thegriffon]

Volume and price rise quickly in the very near term when short sellers cover their positions. Look for the stock to return to normal when this market activity subsides. Glee over a few hours of upticks is a recipe for slaughter of those who buy on speculation and misinformation.

Buickman

Stick to what you know BM. The previous answer was perfectly correct. The price prior to the release reflected expectations regarding the loss, the price immediately afterward was adjusted to reflect how accurate those expectations were, and in which direction they were in error. Analysts on average expected a slightly better loss, but apparently more money was behind a slightly worse loss, nothing more, nothing less. It has no bearing on short selling (if you even know what that is) or on continuing market expectations about GM's future.

[evok]

Today's release says 1.3 billion, after rounding of course.

1.253 Exactlly as issues in the 10k.

[evok]

I just briefly went through the data in the release and yes the corporate loss was not what I was expecting and taken a little off guard because I was still expecting GM to book more 1 time charges as a result of DPH/GM employee buyouts etc. That I suspect may still come as the year unfolds.

But what really drove the less than expected loose was that GM booked the revenue from the couple billion from the VEBA withdrawels and the Suzuki sell off.

The real automotive numbers do not look all that bright but it does show that GM as a entitiy still has breathing room to pull off the restructuring.

That is what is driving the stock price.

Still with the pending GMAC cash infusion in the 4thQ, more 1X charge to come, you need to look behind the press release to get a better understanding as to what is happening over there.

Edited April 20, 2006 by evok

[toyoguy]

Because the settlement received final court approval on March 31, the first $1 billion DC VEBA contribution is being recorded in the first quarter of 2006 even though the cost savings will not be realized until the second half of the year. Beginning July 1, the pretax savings associated with the health-care agreement will be approximately $750 million per quarter through 2011.

$750million per quarter is a huge savings.

GM's automotive operations reported an adjusted loss of $721 million in 2006, including the health-care charge, halving the year-ago adjusted loss of $1.5 billion. All of the company’s automotive units reported progress in the quarter, with three out of the four units posting profitable results.

Liquidity remains a key focus of the corporation. GM sold most of its 20-percent stake in Suzuki during the first quarter, generating approximately $2 billion in cash. Also, GM recently announced the sale of its stake in Isuzu which generated approximately $300 million in proceeds in the second quarter of 2006. In February, GM reduced its common stock dividend by 50 percent, which is expected to save approximately $565 million annually. Finally, the planned sale of 51-percent of GMAC is expected to provide GM with up-front cash proceeds of about $10 billion and significant ongoing cash flow from retained assets and GMAC distributions over time.

I'm not knowledgable enough in accounting to know if that $2billion Suzuki sale is included in calculating profits.

I can see GM returning to profitability by 2007.

[turbo200]

323 million is much closer to black than 1.5 billion. That's obviously a great figure. More reasons for losses to come (buyouts) and more reasons for gains to come (gmac). profitability seems closer than ever.

[evok]

323 million is much closer to black than 1.5 billion. That's obviously a great figure. More reasons for losses to come (buyouts) and more reasons for gains to come (gmac). profitability seems closer than ever.

Yea but it does not show how the auto operation is doing!

[Newbiewar]

Yea but it does not show how the auto operation is doing!

one thing that i noticed was that the revenue was either at a record high or near...

thanks to high sales prices of the GMT900

[sciguy_0504]

Everything seems well, at least a lot better than this time last year, but does the Suzuki sale have something to do with the uptick, also?

[ZL-1]

one thing that i noticed was that the revenue was either at a record high or near...

thanks to high sales prices of the GMT900

That's an important step, and if GM can keep its average transaction prices on the upside as they renew their product portfolio, things will be easier for them. However it immediately comes to mind that if oil hits $100/barrel as some have predicted, SUV sales will suffer and GM's results are extremely sensitive to shifts in consumer demand.

Edited April 20, 2006 by ZL-1

[ZL-1]

From www.gm.com:

GM North America reported an adjusted loss of $946 million in the first quarter of 2006, including $484 million of the retiree health-care settlement charge. This compares to an adjusted loss of $1.5 billion a year ago. Higher production volumes, improved mix and better net pricing contributed $1.1 billion of improvement to GMNA operating earnings, offset in part by the health-care charge. Revenue per unit sold in GMNA was significantly higher in the quarter versus a year ago, mostly attributable to better pricing and richer mix. U.S. dealer inventories ended the quarter at 1,169,000 vehicles, down 74,000 units from the year-ago period, and well positioned for the spring selling season.

I suspect the GMT 900s deserve credit for this.

EDIT: Weight of fleet sales increased to 30.0%, up from 26.9% in Q1 2005: a rise from 39.5% to 41.6% in Cars and a rise from 18.1% to 22.4% in Trucks.

Edited April 20, 2006 by ZL-1

[I hope GMRULES again]

Let's all pray that oil prices don't go through the roof or GM will be in big trouble.

[Northstar]

GM needs to have a ton of the T900 hybrid SUVs available. When we get to $3.50 a gallon (I hope it doesn't happen but it sure seems like it will), everyone who is looking a F/S SUVs will want to have a hybrid if at all possible. If GM has a large supply (which was the problem for the Prius and others when they were new) and can meet demand, GM will be raking in the cash.

[ellives]

Keep in mind, looking beyond the opinions about stock price stated in the prior posts, that stock price is an indication of FUTURE value of the stock and FUTURE earnings. It has nothing to do with any past results.

This said, recent past results are often read as indicators of the POTENTIAL for improvements in the future. Remember the old stock disclaimer: "past earnings are not a guarantee of future earnings" or some such other rubbish.

Past results and published expectations (and some unpublished) are already built into the current stock price.

Rates GM a sell? Why would you do that? GM stock has no where to go but up. Last I looked, their market valuation was less then their net assets.... which is just because people are scared they'll declare bankrupcy.

This is why we don't listen to analysts folks.

[thegriffon]

I just briefly went through the data in the release and yes the corporate loss was not what I was expecting and taken a little off guard because I was still expecting GM to book more 1 time charges as a result of DPH/GM employee buyouts etc.  That I suspect may still come as the year unfolds.

But what really drove the less than expected loose was that GM booked the revenue from the couple billion from the VEBA withdrawels and the Suzuki sell off.

The real automotive numbers do not look all that bright but it does show that GM as a entitiy still has breathing room to pull off the restructuring.

That is what is driving the stock price.

Still with the pending GMAC cash infusion in the 4thQ, more 1X charge to come, you need to look behind the press release to get a better understanding as to what is happening over there.

The Suzuki sale, the VEBA withdrawal and the other once off items were all previously announced, and so should have been factored in to analysts expectations. The real mystery was, "How much money did they lose selling cars?"

[Petra]

Volume and price rise quickly in the very near term when short sellers cover their positions. Look for the stock to return to normal when this market activity subsides. Glee over a few hours of upticks is a recipe for slaughter of those who buy on speculation and misinformation.

What is your point? 'Twas always thus with the stock market, and thus 'twill always be.

I was pleasantly surprised by this news. The near future is starting to look, dare I say it, bright! Providing, of course, that the following things do not happen:

- GM shells out more Billion dollar cheques to the UAW or Delphi.

- Delphi strikes.

- Gas prices go over $3.00/gallon for a sustained period of time.

Unfortunately for us, none of those things are within the control of the consumer. All we can do is wait.

[Mr.Krinkle]

general motors had a relatively good day and the market finished on a record high, well the highest since 2000.

it may be a stretch but thered be lot of slack if gm ever disappeared. at least for a little while.

maybe whats good for gm still is good for america. i know its early and one recall alert and back down it goes...but it would seem as if all hope isnt lost if this can be seen as any kind of indication.

imagine if they ever start to actually make money what would happen...

[Matt276]

From www.gm.com:

I suspect the GMT 900s deserve credit for this.

EDIT: Weight of fleet sales increased to 30.0%, up from 26.9% in Q1 2005: a rise from 39.5% to 41.6% in Cars and a rise from 18.1% to 22.4% in Trucks.

Not good. Money still come from the Large SUVs and Trucks.

[ZL-1]

Not good. Money still come from the Large SUVs and Trucks.

So it seems. I think it's good though, because it appears that GM's cars aren't really that competitive right now, so trucks have to carry the torch.

I only posted those figures to show that it isn's enough for GM execs to say "we're scaling back the fleet business". Looking at GM from the outside, I think they'll have to rely on that side of the business for quite some time, even if the next generation of products sets the standard instead of chasing it.

Edited April 21, 2006 by ZL-1

[thegriffon]

$750million per quarter is a huge savings.

I'm not knowledgable enough in accounting to know if that $2billion Suzuki sale is included in calculating profits. 

I can see GM returning to profitability by 2007.

Only the profit from the Suzuki sale is included inthe profit statement: "These results include a gain of $317 million, or $0.56 per share, from the sale of most of GM’s stake in Suzuki…"

[Newbiewar]

Only the profit from the Suzuki sale is included inthe profit statement: "These results include a gain of $317 million, or $0.56 per share, from the sale of most of GM’s stake in Suzuki…"

i think they took a hit on the izusu shares that they sold..

the suzuki, i thought wagooner said it could be as much as 750 million profit...

the sale of GMAC, i dont know if thats a profit... what else did they sell?

[sciguy_0504]

From www.gm.com:

I suspect the GMT 900s deserve credit for this.

EDIT: Weight of fleet sales increased to 30.0%, up from 26.9% in Q1 2005: a rise from 39.5% to 41.6% in Cars and a rise from 18.1% to 22.4% in Trucks.

So did fleet sales actually rise or did retail sales fall making it look like fleet sales rose?