GM's losses are far less than expected

By ASSOCIATED PRESS
Published July 27, 2006

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DETROIT - General Motors Corp. Chairman and Chief Executive Rick Wagoner won a little bit of driving room Wednesday when his troubled company reported second-quarter results that far exceeded Wall Street expectations.

Although GM's net loss was $3.2-billion, that was mostly because of an anticipated charge for employee buyouts and other restructuring costs. Without one-time charges, the company would have earned $1.2-billion, or $2.03 per share - a number that sent shares up more than 4 percent.

Wagoner has been under pressure to reverse the fortunes of the world's biggest automaker, which lost $10.6-billion last year and faces intense competition from Asian rivals. Billionaire investor Kirk Kerkorian, who owns 9.9 percent of the company, has pressed GM to join an alliance with Renault SA and Nissan Motor Co., fueling speculation that Kerkorian would rather see Renault-Nissan chief executive Carlos Ghosn running GM.

The strong quarter took some of the heat off Wagoner.

"This is a good milestone to show that all the hard work is beginning to pay out," Wagoner told Detroit's WJR-AM. "But we've got plenty of work in front of us. So nobody on the GM side is relaxing today."

GM shares rose $1.34, or 4.4 percent, to $32 in afternoon trading on the New York Stock Exchange. They have traded in a 52-week range of $18.33 to $37.57.

The loss of $5.62 per share in the April-June period compared with a loss of $987-million, or $1.75 per share, for the same period last year.

Without one-time items, GM said it earned $1.2-billion, or $2.03 per share. That was significantly ahead of the 55 cents per share forecast in a survey of analysts at Thomson Financial.

Revenue climbed to $54.4-billion, compared with $48.5-billion in the second quarter of 2005.