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November 7, 2007
DETROIT -- General Motors Corp. posted a company record $39 billion loss in the third quarter, as a charge involving unused tax credits brought an abrupt end to a string of three profitable quarters for the nation's largest automaker, according to the Associated Press.
The loss reported Wednesday was one of the biggest quarterly corporate deficits ever, and it sent GM's shares down more than 5 percent in premarket trading.
GM attributed the third-quarter loss to a $38.6 billion noncash charge largely related to establishing a valuation allowance against accumulated deferred tax credits in the U.S., Canada and Germany, as well as mortgage losses at GM's former financial arm, GMAC Financial Services.
But accounting rules require that companies expecting to keep losing money cannot keep carrying deferred tax credits indefinitely and must write down their value.
"I think you'd have to have a Ph.D. in accounting to understand it," Wagoner said during an interview on "The Paul W. Smith Show" on WJR-AM.
"It doesn't have any impact at all," he said. "I would encourage people not to overreact in a negative way to it."
What might be considered more troubling for GM, though, is continuing losses in its home market, North America, where it reported a net loss from continuing operations of $247 million without the charge for the latest quarter. That compares with a net loss of $667 million in the year-ago period.
The company's overall net loss amounted to $68.85 per share, compared with a net loss of $147 million, or 26 cents per share, in the third quarter of last year.
Posted by Peter C. T. Elsworth 
at 9:38 AM to GM
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