General Motors reported its third-quarter earnings today, and while revenues were up in the three-month period, overall profits were down 14 percent compared to last year. GM's Q3 net revenue was $37.6 billion (almost $1 billion more than 2011), but its net income was $1.5 billion, down from $1.7 billion last year. This is the opposite trend from Chrysler and Ford, which were both up considerably.

According to Automotive News, GM's lower profit came from a combination between the flailing European car market and the increased production of small cars. Losses in Europe grew from $292 million in Q3 2011 to $478 million in Q3 2012, and since 1999, GM has lost more than $17 billion in this market. Also, with new cars like the Chevy Sonic and Spark growing in popularity, these smaller cars have less of a profit margin than GM's SUV cash cows, but the improvements in small cars is helping in markets such as South America.

The South American market has recovered from previous losses to give GM a $114 million profit last quarter, and these numbers are expected to continue climbing thanks to new vehicles like the all-new Chevrolet Onix unveiled last week at the São Paulo Motor Show in Brazil. Another bright spot for GM was that its pension liability dropped by $29 billion thanks to about 30 percent of salaried retirees in the US accepting a lump-sum payment; both figures are higher than GM initially expected.
Show full PR text
GM Reports Third Quarter Net Income of $1.5 billion as EBIT-adjusted increases to $2.3 billion
2012-10-31

DETROIT
– General Motors Co. (NYSE: GM) today announced third quarter net income attributable to common stockholders of $1.5 billion, or $0.89 per fully diluted share including the impact of special items, which reduced net income by $0.1 billion and diluted earnings per share by $0.04. In the third quarter a year ago, GM's net income attributable to common stockholders was $1.7 billion, or $1.03 per fully diluted share.

Net revenue in the third quarter of 2012 was $37.6 billion compared with $36.7 billion a year ago. Earnings before interest and tax (EBIT) adjusted was $2.3 billion compared with $2.2 billion a year ago.

"GM had a solid quarter because customers around the world love our new vehicles and we're also seeing green shoots take hold on tough issues like complexity reduction, pensions and Europe," said Chairman and CEO Dan Akerson. "We are going to keep playing offense with growth products like the Chevrolet Onix, Opel Mokka and Cadillac ATS and continue to systematically address business risks."

Senior Vice President and CFO Dan Ammann added, "While we still have a lot of work to do, especially in Europe, it is encouraging to see our results begin to reflect the discipline we are bringing to bear on the overall business."

GM Results Overview (in billions except for per share amounts)


Q3 2012Q3 2011

Revenue $37.6 $36.7
Net income attributable to common stockholders $1.5 $1.7
Earnings per share (EPS) fully diluted $0.89 $1.03
Impact of special items on EPS fully diluted $0.04 -

EBIT-adjusted $2.3 $2.2

Automotive net cash flow from operating activities $3.1 $1.8
Automotive free cash flow $1.2 $0.3

Third Quarter Segment Results

-GM North America (GMNA) reported EBIT-adjusted of $1.8 billion compared with $2.2 billion a year ago.
-GM Europe (GME) reported an EBIT-adjusted of $(0.5) billion compared with $(0.3) billion a year ago.
-GM International Operations (GMIO) reported EBIT-adjusted of $0.7 billion compared with $0.4 billion a year ago.
-GM South America (GMSA) reported EBIT-adjusted of $0.1 billion compared with near breakeven results a year ago.
-GM Financial earnings before tax was $0.2 billion, up slightly compared with a year ago.
Cash Flow and Liquidity

For the quarter, automotive cash flow from operating activities was $3.1 billion, up $1.3 billion from a year ago, and automotive free cash flow was $1.2 billion, up $0.9 billion. GM ended the quarter with very strong total automotive liquidity of $37.5 billion. Automotive cash and marketable securities was $31.6 billion.

Pension De-Risking Transactions

During the quarter, approximately 30 percent of eligible U.S. salaried retirees accepted GM's offer to receive a lump sum payment in lieu of ongoing pension benefits. In addition, GM expects to close in early November a previously announced transaction through which The Prudential Insurance Company of America will assume responsibility for pension obligations covering GM's remaining eligible U.S. salaried retirees.

Through annuitizations and lump sum payments, approximately $29 billion of GM's U.S. salaried pension liability is expected to be eliminated compared with an original estimate of $26 billion.

In connection with these transactions, GM expects to make total cash contributions to its U.S. salaried pension plan of approximately $2.6 billion. In addition, GM will record an approximately $2.9 billion pre-tax charge in the fourth quarter as a special item. GM originally estimated that it would make a cash contribution of $3.5 billion to $4.5 billion and record a charge of $2.5 billion to $3.5 billion.

Fourth Quarter Outlook

GM's consolidated fourth quarter EBIT-adjusted will follow typical seasonal trends with results estimated to be similar to or slightly better than the same period a year ago.

GM also indicated that to the extent positive financial trends continue the reversal of a significant portion of its valuation allowance on U.S. and Canadian deferred tax assets is possible in the fourth quarter of 2012. At Sept. 30, 2012, valuation allowances on deferred tax assets in the United States and Canada were $35.6 billion and $3.2 billion. In addition, valuation allowance reversals could result in goodwill impairment.

Europe Outlook

GM currently estimates GME's EBIT-adjusted for the 2012 calendar year to be in a range of $(1.5) billion to $(1.8) billion, depending on the level of restructuring activity in the fourth quarter. In addition, the company is targeting full-year 2013 EBIT-adjusted for GME to be slightly better than 2012. Break-even EBIT-adjusted results are targeted by mid-decade.

General Motors Co. (NYSE:GM, TSX: GMM) and its partners produce vehicles in 30 countries, and the company has leadership positions in the world's largest and fastest-growing automotive markets. GM's brands include Chevrolet and Cadillac, as well as Baojun, Buick, GMC, Holden, Isuzu, Jiefang, Opel, Vauxhall and Wuling. More information on the company and its subsidiaries, including OnStar, a global leader in vehicle safety, security and information services, can be found at http://www.gm.com.

Forward-Looking Statements
In this press release and in related comments by our management, our use of the words "expect," "anticipate," "possible," "potential," "target," "believe," "commit," "intend," "continue," "may," "would," "could," "should," "project," "projected," "positioned" or similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results, and our actual results may differ materially due to a variety of important factors. Among other items, such factors might include: our ability to realize production efficiencies and to achieve reductions in costs as a result of our restructuring initiatives and labor modifications; our ability to maintain quality control over our vehicles and avoid material vehicle recalls; our ability to maintain adequate liquidity and financing sources and an appropriate level of debt, including as required to fund our planned significant investment in new technology; the ability of our suppliers to timely deliver parts, components and systems; our ability to realize successful vehicle applications of new technology; the overall strength and stability of our markets, particularly Europe; and our ability to continue to attract new customers, particularly for our new products. GM's most recent annual report on Form 10-K and quarterly reports on Form 10-Q provides information about these and other factors, which we may revise or supplement in future reports to the SEC.


I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.


    • 1 Second Ago
  • 248 Comments
      Camaroman101
      • 2 Years Ago
      cant wait till the elections are over so everyone can stop bringing up anti-democrat & anti-republican bs and some of these first time posters can leave
      jkziggy1
      • 2 Years Ago
      With lots of poorly factchecked comments on this site it is apparent that HuffPost and Motley Crew comments on AOL see a completely different picture. One praises GM for its results and another blasts it. 2011 results after Japan's earthquake problems impacting production caused GM and Ford to have inflated results. Recently Toyota recalled 7 million vehicles due to window motor fires and Honda recalled 1.6 million vehicles due to leaks and fires but hardly a mention on AOL compared to well AOL publizied GM and Ford minor recalls. Lets hope going forward AOL and HUFFPOST fairly report all car company results and show no bias to any car company. At the end of the day with the great need to create American jobs, buy a new vehicle made in the USA whether its made by GM, Ford,Toyota, Hyundai or Honda. Look at the window sticker to see where its made. Your job or a family members job maybe directly or indirectly(supplier) impacted. Factcheck what you see on the internet!
      talari
      • 2 Years Ago
      Funny stuff. I read two totally different articles about GM today. One said "Good News," one said, "Bad News." It's almost like listening to our prospective presidents trying to tell us the truth.
        • 2 Years Ago
        @talari
        [blocked]
      kev
      • 2 Years Ago
      Seems to me GM loses come from trying to sell to other Countries?
      aim54x
      • 2 Years Ago
      Keep allowing the Japanese to put a 100% tariff on our exported vehicles and wonder why we have a problem. Keep allowing China to undervalue their currency. Keep trying to compete with 3rd world wages unless you want to live like the 3rd world. Since were on a roll, lets "keep" being the only country on the planet that refuses to protect their industrial base. Listen folks...our government has been feeding us an "excrement sandwich" and I'm not going back for a thrid helping. Equal trade tariffs and labor rate exchange values solve the problem overnight. Same as currency exchange rates. That my friend is fair trade. If you are stupid enough to believe the nonsense that the previous suggestions would start a trade war I have a newsflash for ya. We've been in one since post WW2 and we have never fired a shot back. Protectionism seems to work great for every other country. Government polices force american companies out of business with unfair trade laws and the highest corporate tax rate on the planet. Problem, crisis, solution. Government creates the problem, watches the ensuing crisis, and then offers the solution and becomes the holy savior. Wake up people. Eat a better sandwich for once.
        • 2 Years Ago
        @aim54x
        [blocked]
      cshae89546
      • 2 Years Ago
      So Obama spent $25,000,000,000 tax payer dollars, threw Delphi employess under the retirement bus for the convenience of the UAW and union vote and GM is down 14% in the third quarter and headed toward bankruptcy or another Obama tax payer bail out. This is another example of why politicians should NOT be allowed to pretend to understand business and/or "invest" tax payer dollars.
        Camaroman101
        • 2 Years Ago
        @cshae89546
        Automotive Center for Research figures: if GM and Chryler had gone under, 50-60 billion in losses to the govt in lost personal taxes, increased unemployment benefits, and food stamps in the first year alone from an estimated 1.5 million jobs lost. 34-54 billion lost in year two
        AnalogJesse
        • 2 Years Ago
        @cshae89546
        GM's stock is up 10% today.
        Julius
        • 2 Years Ago
        @cshae89546
        Umm... GM profits are down 14%... But it is still profitable. Haven't seen a profitable Company.declare.bankruptcy yet. Oh, and I'd also point out that If GM went through a "normal" bankruptcy like Romney suggested they do, then there's chance that those that got nothing would still have got nothing... and the country would have been worse off.
          Wm
          • 2 Years Ago
          @Julius
          Actually profitable companies have filed for bankruptcy. I see GM is likely to get another bailout. Peugeot is almost insolvent and will likely need many billions from the French government. I wonder how GM would feel if the French government just took there shares and gave them nothing? I'm sure US government will look out for their interests and do whatever is needed to make sure that doesn't happen.
          montgomeryjhn
          • 2 Years Ago
          @Julius
          And yet they still owes us billions. So they are still in the red
        richard
        • 2 Years Ago
        @cshae89546
        Blah, blah, blah, boo friggity-hoo. All I hear is conservatives crying about GM. 25,000,000,000? Weren`t you cons the ones who supported Bush, and his 1 TRILLION DOLLAR WAR? Blah, blah, GM, blah, blah, UAW, blah, blah blah,....
          Camaroman101
          • 2 Years Ago
          @richard
          @knodoctor you dont think your taxpayer dollars go towards the military?! even your kids, kids, kids will be paying for the war out of their pockets
          • 2 Years Ago
          @richard
          [blocked]
          proceedpermit
          • 2 Years Ago
          @richard
          Bailouts are addictive. As the American auto industry flounders, politicians like Obama will be fast to spend your taxes to bankroll select winners and losers in the private sector and lay claim to their voing allegiances. Unions and auto execs have politicians like Obama by the short hairs. What is their incentive for success.......payback of the $25 million? What's the likelihood of that happening? There are other ways of rebuilding and maximizing the number of jobs that survive the cuts but it will take an experienced, bottom line businessman to cut excessive expenses , force reforms and manage the bottom line. Do taxpayers approve of $80 per hr pay plus benefits for an assembly line worker? A hard look at the cost of benefits and cushy retirement programs is in order as long as taxpayer money is being used.
      drewski
      • 2 Years Ago
      Lets see. GM has a 45 billion tax credit from there creative bankruptcy to where they pay little in tax. So net income of $1.5 billion and not paying any tax, not so good. Oh, they did give their UAW workers a $7000.00 profit sharing bonus, even though the US taxpayer is still on the hook for $16 billion on over rated stock. Nothing was fixed at GM, only pushed out a few more years on the backs of the taxpayer.
        • 2 Years Ago
        @drewski
        [blocked]
        pauleygm
        • 2 Years Ago
        @drewski
        You are completely correct......except GM actually pays no taxes thanks to the obama administration.
      rudykobus
      • 2 Years Ago
      The sadder truth is that in order for GM to pay back the 54 Billion given to them by the current administration? The share price would need to exceed $52.00 p/ share. Another Federal Government Investment gone bad. It always easy to spend other peoples money or in this case pay off bud's " Labor Unions" and indebt all of us. So much for Hope and Change ! just for all you nay-sayes ? Ford Motor company during the same time period secured a PRIVATE 24 Billion dollar line of credit ! This is the way business should be done in a free market, capitolistic economic enviroment. Romney/Ryan 2012
        Walt
        • 2 Years Ago
        @rudykobus
        There is no payback on common stock. Team Obama lost this one, they should have made it all loans repayable to the government, instead of taking common stock. Net results are GM doesn't owe the government anything.
      safricker
      • 2 Years Ago
      The idiot comments on here really bring out the real stupid and uneducated people !! If the media would tell the real story of the write-offs and growth expense structure GM had to incurr, it might mean something instead of communist media trying to ruin an American Company. Americans need to support the American owned companies for the sake of our economy and survival. They can take their Camry's and FJ's all the way to their unemployment line.
        VDuB
        • 2 Years Ago
        @safricker
        American made parts. American made vehicle. Yup, I'll take the Camry. Sure the profits don't go to some exec in Detroit, but they are supporting a lot more middle class people.
          richard
          • 2 Years Ago
          @VDuB
          American made parts huh? When Japan had that tsunami last year, why did Honda and Toyota have to shut down their token assembly plants here in America? Be an American, and buy American.
          • 2 Years Ago
          @VDuB
          [blocked]
          VDuB
          • 2 Years Ago
          @VDuB
          @richard Maybe the engine and transmission come from Japan? Can't build a car without the main components. It's unbelieveable the stupidity on this site.
          richard
          • 2 Years Ago
          @VDuB
          Asia supporter.
          VDuB
          • 2 Years Ago
          @VDuB
          @John Murphy. Import parts from where? Asia? Do you know how long it takes to ship parts overseas? So they're just going to idle their plants to wait for parts overseas? Ok.. fly the parts. Do you know how much air cargo is? Trust me, I do this for a living. You are probably a plumber.
          john92lx91gls
          • 2 Years Ago
          @VDuB
          Define "a lot more". Do you think that Toyota employs more people in the US than GM? And a guy who hires 50+ people and makes his money becuase of Toyota wouldn't make his user name "VDuB", ya idiot.
          Camaroman101
          • 2 Years Ago
          @VDuB
          Dont be fooled by Toyota's "made in America" gimmick. You are supporting less middle class Americans and jobs in general by buying a Camry over say a Malibu or a Fusion. Do you think all that is required to come out with a car is assembly line workers and parts makers? There are a ton more behind the scenes jobs like designers, researchers, tons of engineers, testers, accountants, etc. Ford or GM employ far more workers in the US than say Toyota or Honda, so even if your domestic was assembled in another country you are still supporting more far more American jobs by buying domestic.
          VDuB
          • 2 Years Ago
          @VDuB
          @Camaroman Yea, give me an article from 2009. Lol.. typical GM owner. @john VDuB might mean something other then i drive a volkwagen. john92xlxyzimanidiot mean something?
          pauleygm
          • 2 Years Ago
          @VDuB
          @ all you morons arguing with VDuB. Honda and Toyota does employ more Americans than GM, Ford, and Chrysler(which by the way is owned by Fiat, so it's not really "American" anyway is it). Please check your facts, just because a vehicle is "assembled" in America doesn't make it American made.
        VDuB
        • 2 Years Ago
        @safricker
        Sorry, Avalon is most American made. Site your sources http://www.thestreet.com/story/11603343/11/10-most-american-made-cars-of-2012.html I have a warehouse in OH for Toyota. I hired 50+ people. Thanks Toyota.
          Walt
          • 2 Years Ago
          @VDuB
          So if it is "most American made", does that include Japanese owned and run parts suppliers operating on American soil? Let's start looking at "American Owned" parts suppliers when calculating the percentage of American parts.
          VDuB
          • 2 Years Ago
          @VDuB
          So Japanese owned suppliers import Japanese workers? Guess what, they create American jobs too! Double win!!
      gstev75035
      • 2 Years Ago
      GM was a huge waste of our money. Obama screwed the investors and the taxpayers in favor of his union buddies. Obama has no concept of how a business or economy works. Fire him!!!!!
        Julius
        • 2 Years Ago
        @gstev75035
        Really...? Why is this an issue with GM, and yet noone who was an investor in Bear Sterns is complaining that it got sold for literally a penny on the dollar by the government to JP Morgan Chase?
      Danny
      • 2 Years Ago
      GM will be toast by 2017............Obama must of had a spinning brain to give $60-billion to a loser like GM. We will never see it paid back. Why, because they no longer know how to make a profit with The Obama Gov't watching there every move. What's that old saying----> "Stupid is as Stupid does"
        Julius
        • 2 Years Ago
        @Danny
        Umm... you did read the article where they said that GM actually made $1.5 billion in PROFIT last quarter, no?
        sadams8174
        • 2 Years Ago
        @Danny
        GM will have a new name. A Stupidmaker! Sounds like, acts like Studabaker, which by the way is gone also!
        msspamrefuge
        • 2 Years Ago
        @Danny
        "Why, because they no longer know how to make a profit with The Obama Gov't watching there every move." GM's moves resulted in multiple, often consecutive quarters of loss from 2005-2009. I could be wrong, but that suggests they stunk at making a profit well before the government intervened.
          msspamrefuge
          • 2 Years Ago
          @msspamrefuge
          P.S. - GM posted straight annual losses for that duration that totalled over 100 billion dollars.
        • 2 Years Ago
        @Danny
        [blocked]
      BYALTF
      • 2 Years Ago
      Just read that GM cited increased warranty costs as a reason for lowered profits. Not a good indication of product quality.
        Walt
        • 2 Years Ago
        @BYALTF
        But a good indication of commitment to customer satisfaction. I'd rather have issues addressed immediately, rather than the foot dragging that is the hallmark of Asian vehicle recalls.
          TPGIII
          • 2 Years Ago
          @Walt
          Wake up! Wouldn't it be better to have no problems? There was nothing that said issues are being address immediately. The statement was that warranty cost increased enough that it had a negative affect on profitability. Only sheeple could turn that into a positive. Asian cars are better know for have very few problems, or did you just wake up Rip.
    • Load More Comments