Charges Take GM to $3.3 Billion Loss

General Motors (GM Quote) reported a first-quarter loss of $3.25 billion, a result influenced heavily by a writedown in the value of its interest in GMAC and a charge related to the Delphi (DPHIQ Quote) bankruptcy.

GM's per-share loss totaled $5.74. In the same quarter a year earlier, GM had a loss from continuing operations of $42 million, or 7 cents a share. Revenue for the quarter ticked lower, slipping to $42.7 billion from $43.4 billion in the 2007 period.

Excluding special items that cut its bottom line by $2.9 billion, GM would have posted an adjusted loss of $350 million, or 62 cents a share, in the first quarter. On that basis, it exceeded the consensus estimate, which was for a loss of $1.60. Revenue was also better than the expected $40.8 billion.

GM Flies Off the Cliff

The biggest item was a $1.45 billion charge to record a noncash partial impairment of GM's equity investment in GMAC. Based on current market pricing, GM concluded that the estimated fair value of the common and preferred equity interests it holds in GMAC were approximately $1.45 billion less than its carrying value.

GM also took a noncash charge of $731 million to increase its liability for estimated costs associated with Delphi's bankruptcy and restructuring. In addition, GM recorded $394 million in noncash tax-related valuation allowances related to deferred tax assets in Europe, and $324 million in charges for restructuring actions in North America and Europe.

"We continue to leverage our global product portfolio to take advantage of tremendous growth in key emerging markets, while at the same time taking the appropriate actions to deal with the challenging economic conditions in the U.S.," GM Chairman and CEO Rick Wagoner said in a press release Wednesday.