In the third quarter, General Motors Co.'s European operations had a wider loss compared to the second quarter – putting a damper on the positive results anticipated for its initial public offering next week.
Before interest and taxes, GM Europe's third-quarter loss was $559 million, more than double the $160 million in the quarter ended June 30.
GM Europe posted losses of $1.2 billion on an Ebit basis in three quarters this year. Due to the quickening recovery in North America, GM posted a net income of $1.96 billion on revenues of $34.06 billion in the third-quarter.
For the same period in 2009, GM reported a $1.2 billion loss after undertaking a U.S.-funded overhaul in bankruptcy court. According to GM Chief Financial Officer Chris Liddell, the European loss originates largely from a normal industrywide reduction in volumes during the summer period.
The loss was limited due to the launch of the new Opel/Vauxhall Meriva and an improvement in Chevrolet sales in Europe, as well as favorable foreign exchange rates.
GM CEO Dan Akerson said that the company realizes that there’s “much more work to do.” He promises that the company will be “vigilant” in cutting costs and boosting marketing. [via autonews - sub. required]