General Motors (GM) became the latest blue chip to report losses from mortgage-backed securities. GM posted a $3.25 billion loss ($5.74 per share) on $42.7 billion in revenue. Excluding one-time costs, however, the company’s loss shrunk to $0.62 per share, far ahead of the Street’s $1.52 expectation. Bloomberg:
labour unrest, a slowing U.S. economy and losses at the partly owned GMAC LLC finance unit are thwarting GM Chief Executive Officer Rick Wagoner’s plans to end three years of losses.
“Wagoner needs to get North America stabilised, and over the last year it has gotten worse,” said Tim Gilbert, who helps manage about $131 billion in assets including GM debt at Principal Global Investors in Des Moines, Iowa.
GMAC, the company’s finance unit, recorded a $589 million loss yesterday, including an $859 million loss at its Residential Capital mortgage unit. GMAC, of which GM now owns only 49%, was spun off to private equity giant Cerberus Capital Management in 2006 and GM is responsible for only $276 million of its loss.
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