General Motors today forecast its largest quarterly loss since 1992, cut its estimate for annual profit by more than 50% and restated a 2004 fourth-quarter profit as a loss.
GM shares dropped 14%, the biggest decline since 1987, and S&P lowered its outlook on the company to negative.
Clearly we have significant challenges in North America. The rest of our automotive businesses, and GMAC, are running in line with, or ahead of, our expectations. But North America is our biggest business, and the key driver of automotive earnings and cash flow. So it’s important that we get this business right.—GM Chairman and Chief Executive Officer Rick Wagoner
GM’s U.S. sales dropped 10% in the first two months of 2005, resulting in the company having less than 25% of the market. Sales of its largest SUVs declined 28%, attributed by some to rising fuel prices. Toyota’s share rose to 13.1% percent from 12.1% in the first two months.
GM’s current market value is $16.6 billion—one-eighth the size of Toyota.