At General Motors, the present is gloomy and the future uncertain. And suddenly the past isn't looking so great either.
Last week, GM said it will restate its 2001 earnings downward because they were artificially inflated by $300 million to $400 million. The problem: GM was supposed to book rebates it received from suppliers in 2001 over time, rather than recording the entire amount that same year.
GM said it would release new figures at an unspecified date. The restatement could affect subsequent years as well.
The restatement and related SEC investigations create "another distraction as North American operating challenges mount," wrote Goldman Sachs analyst Patrick Archambault in a report last Thursday. "So we would not be surprised to see pressure on GM shares."
Indeed. GM shares closed Thursday at $23.51, close to its 52-week low of $22.74.