October 15, 2003

Not So Stealth Financial Gets Shot Down

GM has paid for its financial sins already, as the stock chart shows. This is the downside of an automobile company moonlighting as a financial company. It makes you wonder how many companies who've gone into the business of issuing credit cards to boost sales are similarly exposed. More on that when I can dig into it. It the meantime, don't expect the market to forgive GM for reporting news like this. From Bloomberg: Excluding its Hughes satellite unit and one-time charges, GM's operating profit fell 36 percent, to $448 million, or 80 cents a share. Analysts, on average, had forecast GM's earnings at 67 cents a share according to Reuters Research, a unit of Reuters Group Plc. GMAC, GM's finance arm, earned $630 million, a 32 percent gain over a year ago. As with the first half of the year, much of the increase came from GMAC's mortgage business, which boosted earnings by $100 million. Earnings from GM's global automotive business fell 91 percent to $34 million. Its North American auto business earned $128 million, a 76 percent decline, as production fell 5 percent and consumer incentives rose. The results would have been worse had GM not reduced its reserves for vehicle recalls by $55 million. Pray For Us Sinners Now and at the Hour of our Death...


Post a Comment

<< Home