Even without considering the tax adjustment of $38.6 billion and other special items like the $3.5 billion sale of Allison Transmission, GM still lost around $1.6 billion last quarter, compared to the $497 million profit it earned for the same quarter last year.
Despite the red ink on paper, GM's auto business actually performed well in the third quarter. It recorded a profit of $122 million compared with a loss of $577 million in Q3 2006. Global sales reached 2.39 million vehicles, up 4 percent from last year and a record for the company.
Nevertheless, the tax accounting adjustment that led to a total loss of around $39 billion stands as the largest quarterly loss ever for GM, surpassing the $21 billion hit the company took in 1992. As such, the announcement of GM's earnings today have been driving down the Dow Jones Industrial Average. At 11:48 AM EST, the Dow is down 143.80 points.
[Source: The Detroit News, BloggingStocks]