Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

General Motors Swung to Loss, Burning $8 Billion During Q2 Lockdown

Published 07/29/2020, 07:34 AM
Updated 07/29/2020, 07:34 AM
© Reuters.  General Motors Earnings, Revenue Beat in Q2

© Reuters. General Motors Earnings, Revenue Beat in Q2

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.

Stay up-to-date on all of the upcoming earnings reports by visiting Investing.com's earnings calendar

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.