General Motors Posts $1.2 Billion In Losses, Seeks To Begin Repayments
General Motors Co. reported that it lost $1.2 billion in the time between when it left bankruptcy protection through the end of September. This is a significant improvement on previous quarters showing that the battered automotive maker is recovering from the downturn in business.
The company said that it plans to begin repayment of the loans received from the U.S. government starting with a $1.2 billion payment in December, and completing repayment 2010, which would come five years ahead of the original schedule.
"We have significantly more work to do, but today's results provide evidence of the solid foundation we’re building for the new GM," GM President and CEO Fritz Henderson said. "With a healthier balance sheet and a competitive cost structure, our focus is on driving top line performance."
The improved quarter results are due in a large part to the significantly lower payments for the company's one time debt of $95 billion.
GM saw popularity of the Chevrolet Camaro muscle car and two midsize crossover vehicles, the Chevy Equinox and GMC Terrain. The larger cars, including the unfriendly to fuel Camaro, are benefiting from loser gas prices from the year-ago period. Consumers are not as hesitant toward the purchase of some of the cars that do not have great gas mileage.
Revenue for the third quarter was $26.4 billion, up from the $22.4 billion earned in the same quarter last year. The company's revenue was impacted by the U.S. government's Cash for Clunkers program. Also, GM saw a 6 percent increase in unit sales in the China market as the company attempt to grow its international presence.
GM is expected be ready for initial public offering in the second half of next year. The timing of the IPO will hinge on the timing of the company returning to profitability.
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