Record loss hits GM hard

first_img AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREStriving toward a more perfect me: Doug McIntyre GM’s third-quarter loss of $39billion was the second-worst quarterly net loss in U.S. corporate history under generally accepted accounting principles, said Howard Silverblatt, senior index analyst for Standard & Poor’s. The loss was exceeded only by AOL Time Warner’s $44.9billion, or $10.04 per share loss, in the fourth quarter of 2002, he said. GM attributed most of the third-quarter loss to a $38.6billion noncash charge related to accumulated deferred tax credits in the U.S., Canada and Germany. Accounting rules require companies to write down the value of such credits if they have scant prospects for a return to profitability in the near term. Reaction was swift. GM shares fell nearly 5percent, or $1.67, to $34.48. S&P cut GM’s 12-month target price by $7, to $32, while Moody’s Investors Service downgraded its outlook on GM from positive to stable. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! DETROIT – It’s hard to ignore the second-largest quarterly loss in U.S. history. But General Motors Corp.’s record $39billion loss on a charge involving unused tax credits was only one piece of dire news for the world’s largest car company. GM is hemorrhaging money, particularly in North America, and the outlook for 2008 and beyond is bleak. A soft U.S. market, high gas prices, the housing slump and jittery consumers will hamper the automaker’s restructuring efforts, industry analysts said. GM reported the latest loss Wednesday. “We continue to expect the fundamentals to worsen before they improve,” Bear Stearns analyst Peter Nesvold said in a note to analysts. last_img