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GM Posts a $14 billion Q2 Turnaround

Profits of $1.3 billion jump from $13 billion loss during the same period in 2009 when it was bankrupt as cost cutting takes hold.

by on Aug.12, 2010

Good enough progress for long enough to peddle the taxpayer owned stock?

General Motors Company today announced its second quarter 2010 results with revenue of $33.2 billion and net income attributable to common stockholders of $1.3 billion. This is about a $14 billion swing when compared to the loss of almost $13 billion in Q2 of 2009 when it was bankrupt. GM only survived because of lavish taxpayer subsidies from the Canadian and U.S. governments.

GM earnings per privately-held share on a diluted basis tallied at $2.55.  GM’s second quarter earnings before interest and tax (EBIT) was $2.0 billion.

Whether the results are good enough to engender private and institutional investor confidence in a pending IPO will be a matter of much debate today. Since the offering will be among the largest in history, its timing is crucial to acceptance.

“Yes, these are good enough results to get an IPO done,” said Joe Phillippi of the AutoTrends consultancy. Phillippi, who has written road show presentations for IPOs, noted that big questions remain around market conditions. “‘How many shares and at what price will private and institutional investors accept?” Phillippi said.

GM refused to comment on the IPO.

During the second quarter, GM vehicle production was up in all regions, totaling about 700,000 more vehicles at 2.3 million than the previous quarter. It estimated its global market share at 11.6%, with  share gains in every region.

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GM Q2 Results Tomorrow. IPO Filing Friday?

Look for significantly improved profits, as production is way up, costs slashed. Only problem is Opel's bleeding in Europe.

by on Aug.11, 2010

No one is happy with taxpayer ownership of GM.

General Motors Company is due to release Q2 results tomorrow morning that some analysts predict will be a significant improvement on its Q1 performance.

Some of the speculation was prompted by GM CEO Ed Whitacre, who recently said that the privately held company would post impressive results in Q2, implying it would far surpass a profit of $865 million in Q1.

A blowout quarter is the next step in building a story for potential buyers of new GM stock when the reorganized company goes public, a goal that all senior executives are focused on, with considerable pressure from the Obama Administration. Facing increasing Republican criticism of government spending, the Administration wants to put the politically unpopular taxpayer funded auto bailouts behind it before the midterm Congressional elections this fall.

Government Motors, as GM is derisively known in conservative circles, is also a huge marketing negative for a company that has been losing share for decades.

An IPO will require an Securities and Exchange Commission filing that could come as soon as Friday, says Joe Phillippi of the AutoTrends consultancy.

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GM Posts $0.9 Billion Q1 Profit

Increased production and lower costs have positive effect.

by on May.17, 2010

First quarterly profit in years is good news at a recovering GM.

General Motors Company today said it had revenue of $31.5 billion and operating income of $1.2 billion during the first quarter of 2010. GM’s net income attributable to common stockholders was $0.9 billion ($865 million) resulting in earnings per share on a diluted basis of $1.66.

It was the first quarterly profit at the company since 2007.

GM lost $6 billion in the first quarter of 2009 as the Obama administration prepared to force it into a chapter 11 reorganization, which saw taxpayers taking control of the ailing firm while $50 billion was injected into the automaker.

GM’s said in a statement that its first quarter earnings before interest and tax (EBIT) was $1.7 billion, after adjusting for the favorable impact of the sale of the Saab brand.

GM North America had EBIT in the first quarter 2010 of $1.2 billion, up from a loss of $3.4 billion in the fourth quarter 2009. GM Europe had a loss before interest and taxes of $0.5 billion, an improvement of $0.3 billion from the fourth quarter. GM International Operations posted EBIT of $1.2 billion, up $0.5 billion from the fourth quarter.

Cash flow from operating activities was $1.7 billion and after adjusting for capital expenditures of $0.7 billion, free cash flow was $1.0 billion. GM ended the first quarter with $35.7 billion in cash and marketable securities, including funds in escrow.

“We’re pleased with our first quarter performance, in particular achieving profitability,” said Chris Liddell, vice chairman and chief financial officer.

“In North America we are adding production to keep up with strong demand for new products in our four brands. We’re also steadily growing in emerging markets, keeping our costs under control, generating positive cash flow and maintaining a strong balance sheet. These are all important steps as we lay the foundation for a successful GM,” said Liddell.

GM Delays Annual Report Filing for Two Weeks

“Fresh Start” accounting requires a huge and time consuming restatement of values. Old GM results are irrelevant anyway.

by on Mar.29, 2010

It's the new numbers, not the old ones that matter.

General Motors Company is unable to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2009, by March 31, 2010, as required by U.S. Security and Exchange Commission regulations.

The delay is because it is still finalizing so-called “fresh start” adjustments, as required by Generally Accepted Accounting Principles, GM said this morning.

Under GAAP, GM must restate the value of all the assets acquired and liabilities assumed from General Motors Corporation, or the “Old GM,” in connection with Old GM’s sale of assets to GM Company under Section 363 of the United States Bankruptcy Code.

A GM spokesperson told me that the filing should be finished sometime during the next two weeks. This is ultimately a non-news story, as the numbers of a now bankrupt GM corporation are irrelevant. Financial results for the new GM’s Q1 2010 are expected in May.

Daniel Ammann has been appointed GM vice president finance and treasurer.

Daniel Ammann is now GM's treasurer.

GM’s annual report is expected to depict breathtaking losses in 2009 of old GM, leading to the bankruptcy last year that was forced on it by President Obama and his advisers at the U.S. Treasury Department.

However, the restatement of values will likely increase the strength of the new Company’s balance sheet. This is a necessary prelude to a successful offering of public stock. (See GM Has a Chance of Being Profitable In 2010 by right clicking on it.)

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GM Has a Chance of Being Profitable In 2010

CFO says “anti-halo” effect biased Feds against finance staff.

by on Mar.17, 2010

Liddell drove a Ferrari California to work at Microsoft. Now he's in a Cadillac.

The new  Chief Financial Officer of General Motors Company, Chris Liddell, says the maker has  a “reasonable chance” of returning to profitability this year.

If it happens – this would end an earnings drought that has totaled $88 billion in losses from 2005 through last year’s first quarter.

Liddell, a New Zealander, came to GM after serving as Microsoft’s Chief Financial Officer since May of 2005.

His background is relatively diverse by Detroit standards, and includes a stint as CFO of International Paper Company. Prior to that, Liddell served as CEO of Carter Holt Harvey, which was, at the time, one of New Zealand’s largest publicly traded firms.

Liddell replaced Ray Young in January, who became GM’s vice president of international operations the next month. His immediate, 13-hour a day, job is pulling together “fresh start accounting,” for the loss-making and newly reorganized company.

This gargantuan task, Liddell says, will result in financial statements that are “thorough, structured and competent.” GM is also supplying regular reports to the U.S. government, and he is not sure if  this is more onerous than reports required from publicly traded companies.

Liddell observed, tongue firmly in cheek, that of all the options he was considering last fall when he was recruited,  including becoming the head of a company, GM was “the hardest job, with the least amount of pay and probably the toughest situation of all the ones I was looking at. But other than that the decision was an entirely rational one.”

GM raided Microsoft for its long-awaited new CFO.

Liddell’s compensation  package includes not only $750,000 in annual salary, but also nearly $5.5 million more in stock. Of course, that depends on GM pulling off  an initial public offering (IPO), which would list the company on a major exchange, allowing it to trade stock.

As to when publicly traded becomes applicable again, GM needs to be profitable to undertake an IPO, which is “possible in the second half,”  of 2010 said Liddell, who was meeting with media for the first time during a breakfast at GM headquarters in Detroit.

However, the affable Kiwi qualified his comments on IPO timing with carefully chosen observations that included the strength of GM vehicle sales and their future prospects at the time of the offering.

The strength of the financial markets and their ability to absorb what will be a large public offering of  the company are also big factors. GM is more than 60% owned by U.S. and Canadian taxpayers,

“I wouldn’t go further than possible… the timing has to be right,” Liddell says.

One area where Liddell did not hedge, though, was countering the claims by ex U.S. Treasury official, Steven Rattner,  who claimed that GM’s financial staff was incompetent. (Click Here.)   (more…)

Europe Quite Challenge for GM, CFO Admits

Chinese and Latin American arms are profitable. U.S. is, well...

by on Mar.17, 2010

Logo on the Renaissance Center's 740 foot high, 73-floor hotel tower identifies the complex as General Motors Global Headquarters.

General Motors Company should be profitable this year even though its European operations are a mess, said Chris Liddell, GM’s new chief financial officer.

In Europe for 2009, General Motors  suffered from its well-publicized bankruptcy, problems at Saab and Opel/Vauxhall, as group sales for all brands dropped more than 9%. GM’s share settled at 9% for fifth place, with it losing almost 2 percentage points in share.

Liddell also stressed at a meeting with reporters today that he was not offering any kind of official  financial guidance to investors or analysts.

But he said the automaker has a chance of being profitable in 2010. GM’s operations in China and Latin America already are profitable, North American is “in the middle” while GM’s European operations are struggling.

“ I think we have a reasonable chance of being profitable this year,” said Liddell, who was initially recruited from Microsoft by former GM CEO Fritz Henderson.

Liddell said GM’s profitability and the future stock offering are interconnected. “There are a large number of factors that go into the decision,” to launch an initial public offering of new common stock, he said.    (more…)

GM Pays German Government another €200 Million

Government loans are being slowly paid as reorganized GM generates cash. More than $29 billion in debt is outstanding.

by on Nov.16, 2009

Angela Merkel, German Chancellor

The German government called the loan when it became clear that German jobs would not be overly protected in a GM reorganization.

General Motors has returned to German taxpayers another €200 million ($299.3 million) on the Opel bridge loan that was made last spring when it was planning on selling its loss making European arm.

GM has since decided to reorganize Opel by itself,  and the German government called the loan when it became clear that German jobs would not be overly protected  compared with other Opel/Vauxhaul locations in the United Kingdom and Europe.

GM now has an outstanding balance of €400 million, which GM expects to pay back by November 30,” according to Enrico Digirolamo, GM Europe Vice President and Chief Financial Officer.

With production restarted after its 60-day bankruptcy proceeding, GM is once again generating cash and paying down some of its debt.

With the Opel bridge loan, GM had a balance of €900 million (~$1.3 billion) as of September 30, 2009. Opel has already repaid €500 million (~$0.7 billion) of that in November, and will repay the remaining €400 million (~$0.6 billion) balance by the end of the month. The cash balance in Europe as of September 30, 2009 was $2.9 billion.

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General Motors Company Posts $1.2 Billion Loss

It will pay back first $1.2 billion to taxpayers next month.

by on Nov.16, 2009

The full costs of health care have not yet been accounted for.

The full costs of health care have not yet been accounted for, or the value of the stock.

General Motors Company (GM) released today preliminary results for its first 83 days of operation, providing an initial look at its still tenuous financial health.

GM’s earnings before taxes for the July 10-Sept. 30 period resulted in a loss of $1.0 billion since it began operations as a reorganized company on July 10.

GM recorded special items for the same period of $505 million, attributed primarily to dealer restructuring, attrition-related charges and Delphi.

For the July 10-Sept. 30 period GM posted a loss after taxes of $1.2 billion.

The results did not conform to Generally Accepted Accounting Procedures (GAAP), which are required of publicly traded companies in the U.S. , since GM is privately held, largely by taxpayers.

In spite of its restructuring, the company is not yet at a break even point, according to Fritz Henderson, CEO, primarily because of costs, including the enormous cost of  health care in the U.S.

Henderson characterized the results as “not satisfactory.”

General Motors Company Q3 2009 Unaudited Non-GAAP Results

“Old GM”July 1-July 9, 2009 GM July 10-Sept. 30, 2009
($mils)
Net revenue $1,637 $26,352
Earnings before interest and taxes (before special items) $(627) $(261)
Net interest $(209) $(250)
Special items (1) $79,672 $(505)
Earnings before taxes $78,836 $(1,016)
Taxes $522 $(135)
Total managerial income/(loss) $79,358 $(1,151)
Managerial operating cash flow (before special items)($bils) $(3.6) $3.3
Global cash and cash-related balance ($bils) $37.6 $42.6
(1) Special items for July 1-July 9, 2009 includes a reorganization gain of $80.7 billion.
Dollars and Sense!

Dollars and Sense!

The revenue, cost and cash flow numbers are indicators of GM’s actual health. These and subsequent results are needed to gauge the effectiveness of the reorganization imposed on it by the U.S. Treasury Department, and to assess the likelihood of how much U.S. and Canadian taxpayers will be paid back of  the $50 billion in loans advanced via their ownership stake of 61% of the company.

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GM Will Release Third-Quarter 2009 Results

Data needed to gauge the effectiveness of the reorganization.

by on Nov.12, 2009

The chairman actually works for the taxpayers, who need results to have their loans paid back.

The chairman actually works for the taxpayers, who need results to have their loans paid back.

General Motors Company plans to release its third quarter 2009 preliminary results on Monday morning, November 16, 2009.

The newly restructured company has not published financial results since it entered the bankruptcy process earlier this year in May. The results will cover the period from July 10, when it emerged from bankruptcy, through September 30 of this year.

In its bankruptcy filing, GM said it lost $88 billion between the end 2004 and the first quarter of this year. Analysts expect the company to again lose money but are uncertain as to the amount.

The company also will release figures starting in January 2009 and ending July 9 for the old General Motors Corporation, which remains in bankruptcy and is being liquidated.

The privately held company will not provide numbers that adhere to generally accepted accounting principles as required by the Securities and Exchange Commission for publicly held U.S. firms.

Results!

Results!

Still, revenue, cost and cash flow numbers would be indicators of its actual health. The results are needed to gauge the effectiveness of the reorganization imposed on it by the U.S. Treasury Department, and to assess the likelihood that U.S. and Canadian taxpayers will be paid back, some if not all of, the $50 billion in loans advanced via their ownership stake of 61% of the company.

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GM Sales Nudge Upward in October

The "core"Chevrolet, Buick, GMC and Cadillac brands provide first increase in 21 months. Profitability remains unknown.

by on Nov.03, 2009

General Motors Company reported U.S. October sales of 177,603 vehicles, up 4% from last October, the company’s first year-over-year gain since January 2008.

Total sales increased 13% when compared with September, which was a payback month because of the post “Cash for Clunkers” binge in August and subsequent hangover. However, year-to-date GM’s total sale are off 34%.

GM’s four core brands — Chevrolet, Buick, GMC, and Cadillac – accounted for about 95% GM’s retail sales, an increase of ten percentage points compared to the prior year.

What is unknown at this point is the cost of sales, as GM continues its  60-day money back guarantee, rebate and interest rate incentive programs. The leader in the U.S. market has promised non-GAAP financial statements to it taxpayer owners by the middle of this month.

“We’re very pleased with consumer acceptance to our newest cars, crossovers and trucks,” said Susan Docherty, GM vice president, U.S. Sales. “While we have more work to do, we are making progress and will continue our focus on delivering vehicles and a sales and service experience that brings consumers to Chevrolet, Buick, GMC and Cadillac – and keeps them coming back.”

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