GM reports $2.5B 3Q loss, says running out of cash
07.11.2008 22:03
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- Source: toledoblade.com
DETROIT, Mich. -- General Motors Corp. says it lost $2.5 billion in the third quarter and warned that it could run out of cash in 2009. GM also said it has suspended talks to acquire Chrysler. While it didn't specifically name the automaker, GM said it was setting aside considerations for a "strategic acquisition."
The automaker also said its cash burn for the quarter accelerated to $6.9 billion due to a severe U.S. auto sales slump.
The company on Friday reported a net loss of $4.45 per share during the quarter, compared with a record-setting loss of $39 billion, or $68.85 per share, a year ago.
Revenue fell to $37.9 billion from $43.7 billion, due largely to credit freezing across the globe.
The loss exceeded Wall Street estimates. Analysts surveyed by Thomson Reuters predicted a loss of $3.70 per share on sales of $39.4 billion.
The struggling company announced it would improve liquidity by $5 billion by the end of next year by cutting capital spending, reducing sales promotions, and further cutting production in the first quarter. It also suspended the company match for its stock savings (401k) plan in the U.S.
"Even if GM implements the planned operating actions that are substantially within its control, GM's estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business," the company said in a news release.
"Looking into the first two quarters of 2009, even with its planned actions, the company's estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve" or it receives government funding, the news release said.
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