Did GM Lose Money Again In Q1?
April 14th, 2010 2:27 PM
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Don’t ask Chairman/CEO Ed Whitacre. His only comments so far on GM’s Q1 2010 performance comes from a memo leaked to Reuters, in which he says:
In January, I said we could earn a profit in 2010, if everything falls into place. Our first quarter financial results will show us an important milestone, and I’m pleased to say that I anticipate solid operating results when we report our first quarter financials in May
“Important milestones”? “Solid operating results?” What the hell is Whitacre trying to say?
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Is it me, or does the picture of Whitaker in the background look eerily like the classic "1984" Apple Macintosh ad?
Operating means results before all the special and one-time charges are figured-in. In the past, Ford posted an operating profit, but after all the cash-draining charges were piled-on, they suffered a loss for that quarter. They did, however, take pains to emphasize the operating profit, using this as proof that their restructuring efforts were begining to gain traction. Another time, Ford showed an operating loss, but due to winning a tax-challenge issue with the IRS, and the money they got back (or didn't have to pay-out, but could release from an account reserved for paying in the event they lost) became a one-time credit to the quarterly result, and so despite burning cash on the operating side, they posted a profit for that quarter. My guess is that the charges will drag an either black, or slightly-less red than a year ago, quarter down. If this is the case, expect that GM will emphasize that on an operating basis, the company is improving ... and that this rate of improvement will continue, or increase ... this will be the message GM will try to sell to the markets.
What do they need to earn a profit for? They already made 60 billion in 2009, that's plenty of cash to pay for a few more golden parachuttes.
Whitacre is a master at both avoiding the press and saying nothing of substance when infrequently corralled. Not exactly the kind of CEO that gives me the warm and fuzzies about an IPO.