Thursday, 07 May 2009 10:59

GM Loses $6 Billion as Cash Burn Accelerates to $10 Billion


General Motors lost $6 billion in the first quarter and its revenue fell by nearly half as car buyers worldwide steered clear of showrooms out of fear that the wounded auto giant may go bankrupt and stop honoring its warranties.

The Detroit-based company also said it spent $10.2 billion more cash than it took in from January through March, mainly because revenue dropped by a staggering $20 billion, or 47 percent.

AP story

"Results were awful, as expected, however, GM's cash burn was even worse than we were expecting," Kip Penniman of KDP Investment Advisors said in a note for clients.

Reuters UK Story

GM, in fact, didn’t even realize the worst fears of analysts, who had been anticipating a loss of $7 billion, according to consensus. (Though, let’s be honest, the range of forecasts were wide enough to drive a Hummer through without having to fold in the side view mirrors, so the consensus was more the mid-point of wide chasm than any real reflection of analysts’ realistic expectations of where the quarter would end up.)

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