Investing.com - General Motors (NYSE:GM) burned through $8 billion in cash in the second quarter as Covid-19-driven lockdowns shuttered its factories and crushed its sales.
However, the company's net loss of 50c a share was less than a third of what analysts had feared ahead of time, and even the 53% drop in revenue to $16.80 billion was slightly better than forecast.
The cash burn, which compared to operating cash flow of $11.9 billion a year earlier, had been the number most eagerly awaited by analysts, and was bang in the middle of the $7 billion to $9 billion range that chief executive Mary Barra had forecast. The company ended the quarter with over $30.6 billion in liquidity at its automaking operations.
That ought to reassure the company's investors, who - according to Investing.com analyst Haris Anwar - are focused on one thing only at present: survival.
"At this point, all investors want to know whether there is light at the end of the tunnel and whether car producers have enough cash to survive as they manage through the crisis and try to generate sales," Anwar said.
Anwar added that the company's return from lockdown has been anything but easy, punctuated by "supply-chain disruptions, temporary shutdowns caused by new positive cases and worker absences."
Sales recovered from a low point of -34% on the year in April to being down only 20% on the year in June, with the Buick Encore and Chevrolet Trailblazer notably picking up market share in the small SUV segment.
GM stock rose 3.9% in premarket trading, although it's still down by more than 25% from its February high.
General Motors follows other major Consumer Cyclical sector earnings this month
General Motors's report follows an earnings beat by Tesla on July 22, who reported EPS of $2.18 on revenue of $6.04B, compared to forecasts EPS of $0 on revenue of $5.15B.
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