GM says loss was smaller than reported
07.11.2006 16:25 Insurance News
General Motors Corp. (NYSE:GM - news) said in a regulatory filing on Tuesday its third-quarter loss was smaller than previously reported due to additional loan sales not reported by its finance arm.
The world's largest automaker revised the loss to $91 million, or 16 cents a share, from a previously reported $115 million, or 20 cents a share.
GM had reported the earlier net loss figure late last month as part of its preliminary quarterly results.
In its quarterly filing Tuesday with the Securities and Exchange Commission, GM increased third-quarter revenue to $48.9 billion from $48.8 billion.
GM also said General Motors Acceptance Corp. (GMAC) units have been served with SEC and federal grand jury subpoenas related to investigations into industrywide practices regarding loss mitigation insurance products, such as finite risk insurance.
"GM and GMAC have produced documents and provided testimony in response to the SEC and federal grand jury subpoenas," the automaker said in the filing. "GM and GMAC will continue to cooperate with the SEC and federal grand jury with respect to these matters."
The automaker is also under investigation for its transactions in precious raw metals as well as its method of booking credits from suppliers.
GM reiterated the range of its estimated exposure for benefit guarantees to bankrupt Delphi Corp. (Other OTC:DPHIQ - news) to be between $6 billion and $7.5 billion, but added it would likely be "near the low end" of the range.
GM, which spun off Delphi in 1999, has been in talks with the parts supplier and its unions over a cost-saving labor deal that would allow Delphi to emerge from bankruptcy.
A deal between the United Auto Workers union, Delphi and GM would avert a strike that could shut down GM's production.
On Tuesday, GM said Delphi continues to assure the automaker it expects no disruption in its supply of systems, components and parts.
"Although the challenges faced by Delphi during its restructuring process could create operating and financial risks for GM, that process is also expected to present opportunities for GM," the automaker said in the filing.
"These opportunities include reducing, over the long term, the significant cost penalty GM incurs in obtaining parts from Delphi," it added.
In another closely watched matter, GM repeated it expects to close the $15 billion sale of a 51 percent stake in its finance arm GMAC in the fourth quarter.
UNDER PRESSURE
The quarterly results come as Chief Executive Rick Wagoner is under pressure to show progress in the company's turnaround.
GM, which lost $10.6 billion in 2005, saw global sales fall 2.5 percent in the first nine months of 2006 as it lost U.S. market share to Japan's Toyota Motor Corp. (7203.T).
GM executives are also bracing for a possible proxy fight with billionaire investor Kirk Kerkorian, the automaker's largest individual shareholder.
Kerkorian's financial adviser, Jerry York, quit GM's board in October, after the automaker turned down a potential three-way alliance with Japan's Nissan Motor Co. Ltd. (7201.T) and France's Renault SA (RENA.PA).
(Additional reporting by Christian Plumb in New York)
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