GM Vehicle Sales Dismay Investors

18 October 2004

US car giant General Motors has disappointed Wall Street and shareholders with its third quarter results.

A glut of vehicles resulting in heavy discounts to shift them, fierce competition around the globe and a woeful performance in Europe has forced the company's full year dividend forecasts down to $6.5 (€5, £3.5) a share, versus earlier hopes of $7. Net income in Q3 was $440m.

GM's global automotive operations lost $130 million during that period compared to income of $34 million a year ago.

In Europe the numbers have prompted plans for 12,000 job cuts across the region as the company reports a loss of $236m compared to a $152m deficit a year ago.

Sales of Opel, Saab and Vauxhall brands are sluggish but the company hopes it will save $600m a year by the end of 2006 following the cull of workers.

On the right side of the balance sheet, however, is GM's finance unit, Acceptance Corp which posted earnings of $656m during Q3, up from $630 for the same period in 2003.

Data sourced from USA Today Online; additional content by WARC staff