DETROIT -- General Motors posted an unexpected quarterly loss on Wednesday as stubbornly high costs for everything from materials to worker health care outweighed surprisingly strong car sales and good results from its finance arm.
The news capped a nightmarish second quarter for GM, which is struggling to regain market share from Asian rivals and saw its debt cut to "junk" status by the Standard & Poor's rating agency in May.
The world's largest automaker, which triggered alarm bells on Wall Street when it reported a $1.1 billion loss in the first quarter, said its second-quarter net loss was $286 million, or 51 cents per share.
The results, which included several one-time items, compared with a profit of $1.38 billion, or $2.42 per share, in the year-earlier quarter.
Excluding one-time items, GM lost $318 million, or 56 cents per share, in the quarter. Wall Street analysts' average forecast was a profit of 3 cents a share before special items, according to Reuters Estimates.
Earnings forecasts for GM have varied widely since the company withdrew its earnings and cash flow forecast for the 2005 calendar year in April, citing uncertainty about its efforts to resolve a mounting "health-care cost crisis."
GM said its automotive operations lost $948 million in the second quarter. A loss in North America of $1.19 billion offset profitable results in Europe, Asia and the Latin Anmerican/Mideast region. Like cross-town rival Ford Motor Co., GM has been hit hard by this year's dramatic slowdown in sales of mid- and full-sized sport-utility vehicles, its most profitable models.
GM said second-quarter revenue slipped to $48.5 billion from $49.3 billion a year earlier.
General Motors Acceptance Corp., the company's finance unit, had net income of $816 million in the quarter, down from $846 million a year earlier.
'AN EXTREME BURDEN'
GM, which expects its health-care costs to total nearly $6 billion this year, has been in talks with the United Auto Workers union since April to try to slash some of the health-care benefits that Chief Executive Rick Wagoner blames for hurting the company's ability to compete.
UAW President Ron Gettelfinger has questioned the severity of GM's financial problems, however. And there has been no indication that the union will cede any significant ground on benefits that are the gold standard of the manufacturing sector.
"Our health-care cost situation remains an extreme burden on our ability to compete; we continue to work intensely on solutions to this crisis with our labor unions," Wagoner said in a statement.
Apart from higher health-care costs, GM cited lower production volumes, pricing pressures and rising raw material costs for its weak performance in North America.
To offset cash outflow, which totaled nearly $5 billion in the first quarter, GM said it withdrew $1 billion in the second quarter from a fund set up to provide health care for retired U.S. union workers and their dependents. An additional $1 billion was withdrawn from the fund on July 1, GM said.
GM provided no outlook for its financial results in the third quarter. Analysts, on average, expect earnings of just 9 cents a share before one-time according to Reuters Estimates.
Some analysts are far less sanguine about the outlook for the industrial icon, however.
"We see huge losses returning in the third quarter," David Healy, an analyst with Burnham Securities, said in a recent note to clients.
Healy forecast a third-quarter loss of $1.94 per share and a full-year loss of $3.44 per share.
GM closed the second quarter on a rare high note, boosting its U.S. sales by 41 percent in June.
But the auto industry's discount king also boosted its consumer incentives to an average of $4,458 per vehicle in June, according to industry tracking firm Autodata Corp. That was more than any of its competitors and more than four times the incentives offered by its chief Asian rival, Toyota Motor Corp.