GM results improve
Embattled carmaker reports operating profit excluding all special items, but net loss for another quarter.
NEW YORK (CNNMoney.com) - General Motors Corp. finally got some good financial news, posting an operating profit in the first quarter excluding all special items.
The embattled automaker reported that it earned $152 million, or 26 cents a share, excluding all special items in the period, such as a $1 billion pre-tax charge related to an agreement to change health care coverage for hourly retirees and their families.
Still, the company reported an operating loss of $529 million, or 94 cents a share when it excluded most of the special items but included the health care charge. It was not immediately clear which numbers are accepted by analysts surveyed by earnings tracker First Call, who had a consensus forecast of a loss of 44 cents a share. The company lost $988 million, or $1.75 a share excluding special items in the year earlier period.
Still, even with the improved results, the company continued to lose money on its core automotive operations, with the red ink coming from its North American unit.
The company said it had an adjusted loss of $721 million in the quarter from its auto operations, including $484 million of the health-care settlement charge. The rest of that health care charge is charged against corporate results because it applies to former GM employees at parts maker Delphi.
North American auto operations lost $946 million in the first quarter of 2006, including the health care charge. Still that was an improvement from the adjusted loss of $1.5 billion at that operation a year ago.
But the company's European operations returned to profitability, and profits improved in its other two regions -- Asian-Pacific and Latin America, Africa and the Middle East.
The company's results were lifted by continued strong results at its finance unit, GMAC, even though profits there slipped to $605 million from $728 million a year earlier. GM recently announced plans to sell just more than half of that unit, though, in an attempt to help it eventually return to an investment-grade credit rating.
"We're pleased to see the significant progress in our first-quarter results and in the implementation of all four elements of our North American turnaround plan," said GM Chairman and CEO Rick Wagoner in the company's statement. "And we remain focused on accelerating our return to profitability and cash generation."
But the company didn't give any target or guidance as to when it expected a return to profitability. One major issue still hanging over its future is whether GM can reach an agreement with Delphi and the United Auto Workers union to help the bankrupt parts company trim its labor costs and still keep the union there happy and on the job.
"There is clearly more work to be done," Wagoner said in the statement. "Our next key priority is to reach a consensual agreement with Delphi and its unions that makes sense for all of the parties. The agreement we recently reached with the UAW on the attrition program is a significant step in achieving this objective, but there is more important work to do."
The company's net loss for the period came to $323 million, or 57 cents a share, including all special items. It was the fifth straight quarter of net losses.
Automotive revenue at the company came to $43.2 billion, up from $37.3 billion a year earlier and significantly better than the First Call forecast of $39.4 billion. The company said its revenue per vehicle sold in North America was significantly higher in the quarter than a year ago due to the introduction of new models of its large SUV's.
"We are very pleased with the market's reaction to our launch products," said Wagoner's statement. "In the first three months of the year, our new products accounted for about 30 percent of our total sales -- more than double where we were a couple of years ago. We're especially encouraged by the early sales of the Chevrolet Tahoe, GMC Yukon, and Cadillac Escalade."
Total revenue at GM, including from GMAC, rose to a record $52.2 billion in the period, up from $45.8 billion a year earlier.
For a look at the problems still facing GM, click here.