DETROIT — That jaw-dropping $39 billion third-quarter loss General Motors reported last week may have resulted largely from an accounting adjustment, but it also was a sign that GM's turnaround has veered off course.
Even without the staggering paper loss — due largely to writing down credits that could offset taxes on future earnings — GM had a disappointing quarter. Excluding one-time items, GM lost $1.59 billion, compared with a $497 million profit in the same quarter of last year.
Morgan Stanley analyst Jonathan Steinmetz called GM's third-quarter numbers "messy and weak."
"GM burned $2.7 billion ... in the quarter vs. our projected cash usage of about $2 billion," Steinmetz wrote in a research report. "Although the third quarter is typically weak from a cash flow perspective, we expected to see further progress."
GM's bad quarter was detailed in the same week that Ford Motor Co.'s financial turnaround appeared to gather momentum and Toyota Motor Corp. announced the second-highest quarterly operating profit in its history. (See Page 61.)