Europe sale drags GM to a Q3 loss
DETROIT -- Charges related to General Motors' sale of its European operations dragged the company down to a $3 billion third-quarter net loss, while profits from its continuing operations also declined sharply due to cuts in vehicle production.
GM on Tuesday said its adjusted pretax operating profit -- the number that GM says best represents its underlying financial performance and a key focus for investors -- declined 31 percent to $2.5 billion in the third quarter.
Those results are for its continuing operations and include a $2.3 billion non-cash charge related to the sale of its Opel/Vauxhall operations to France's PSA Group, which closed in August. The sale is expected to cost the company roughly $6.3 billion overall, including $5.4 billion in the third quarter.
Revenue for continuing operations, which exclude Europe, decreased 14 percent to $33.6 billion for the quarter. That's primarily due to a 26 percent, or 268,000-unit, decline in production from a year earlier. The cuts helped lower U.S. dealer inventories by 160,000 units to 821,000 as of Sept. 30, compared with June 30.
GM CFO Chuck Stevens called the results a "very solid quarter" and "on plan" from previous guidance given by the automaker.
"We're on track to deliver a very strong year," he said.
GM previously said it expects to build 150,000 fewer vehicles in North America in the second half of the year than it did in the first. That would amount to a 15 percent decline vs. the second half of 2016, when it built 1.9 million vehicles, according to estimates from the Automotive News Data Center.
Stevens said he expects dealer inventory levels for the year to be lower than 2016.
Adjusted net income, equal to $1.32 a share, beat Wall Street estimates of $1.11 a share.