WORLD> America
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WORLD> America
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GM posts $6B Q1 loss, spends $10.2B in cash
(Agencies)
Updated: 2009-05-07 23:57 As bad as the results look, analysts were expecting worse. Excluding special items, GM's fourth-quarter adjusted loss was $9.66 per share, beating Wall Street's expectations. Analysts surveyed by Thomson Reuters predicted a loss of $11.05 per share on revenue of $20.2 billion. The company reported an operating loss of $3.2 billion from its North American operations alone.
Young would not comment on Fiat's interest in GM's European or Latin America units. Fiat will have a 20 percent stake in Chrysler when that automaker emerges from bankruptcy protection. GM faces an almost impossible list of restructuring tasks to complete before the June 1 deadline. It must get new cost-cutting agreement with its unions, complete a debt-for-stock swap with 90 percent of its bondholders, close factories and cut jobs to prove to the government it can repay the loans. The largest US-based automaker also is trying to cut 2,600 dealerships and is in the process of selling or phasing out the Saturn, Saab and Hummer brands. GM has already decided to get rid of Pontiac. GM shares fell 5 cents, or 3 percent, to $1.61 in morning trading. Young said GM is continuing to simultaneously prepare for bankruptcy as well as its preferred option of restructuring out of court. GM has made an offer to the holders of roughly $27 billion in debt to swap 225 shares of stock for every $1,000 GM owes. The deadline for the swap is May 26, and Young would not comment when asked if the offer might change. CEO Fritz Henderson said Monday that the Treasury Department will not allow GM to offer more than 10 percent of the company's stock to the debtholders. GM ended the quarter with $11.6 billion in cash, down from $14.2 billion on Dec. 31. "Results were awful, as expected, however, GM's cash burn was even worse than we were expecting," said Kip Penniman, a corporate bonds analyst with KDP Investment Advisors in Montpelier, Vt., wrote in a note to investors.
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