General Motors steers to loss as coronavirus shuts dealerships and factories

The automaker lost $758M in Q2

General Motors Co. swung to a loss in the second quarter as factories and dealerships were forced to close amid stay-at-home orders designed to slow the spread of COVID-19.

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The Detroit-based automaker lost $758 million, or an adjusted 50 cents per share, in the three months through June. The company turned $2.4 billion profit a year ago.

Net revenue totaled $16.8 billion, down 53 percent year-over-year. Wall Street analysts surveyed by Refinitiv were anticipating an adjusted loss of $1.77 a share on revenue of $17.3 billion.

“Clearly, the second quarter was a challenge," Chief Financial Officer Dhivya Suryadevara said in a statement. Still, the company nearly broke even on earnings before interest and taxes in North America despite losing eight of 13 weeks of production, he added.

TickerSecurityLastChangeChange %
GMGENERAL MOTORS COMPANY27.98+1.26+4.72%

General Motors’ North American business reported a $100 million loss before interest and taxes while U.S. sales plunged 34 percent from a year ago as COVID-19 resulted in weaker demand and tighter inventories.

Overall sales, which fell 35 percent in April, showed signs of improvement during the final two months of the quarter, rebounding to a year-over-year decline of about 20 percent. GM’s China business reported sales growth and equity income of $200 million.

General Motors continued to make progress on its cost-savings initiative, trimming another $200 million of expenses in the second quarter. The company has now saved $3.8 billion since the beginning of 2018 and remains on track to meet its $4 billion to $4.5 billion target.

Auto free cash flow was negative $9 billion, down $11.6 billion from last year. Total automotive liquidity was $30.6 billion at the end of June.

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GM shares were down 28 percent this year through Tuesday, lagging the S&P 500’s 0.38 percent loss.