General Motors, battered by a global economic collapse and buoyed by U.S. rescue loans, posted its sixth straight quarterly loss and burned through $5.2 billion in cash as revenue shrank by more than a third.
The net loss of $9.6 billion in the fourth quarter compares with a loss of $1.5 billion a year earlier. The operating loss was $5.9 billion. GM said it expects its auditors to cast doubt on the companys ability to survive as a going concern.
The loss sealed CEO Rick Wagoners fourth straight year without a profit and reflects the distress that GM showed last week when it asked the U.S. Treasury Department for as much as $16.6 billion in additional government aid. GM, which has received $13.4 billion so far, said the request signaled a market that was deteriorating more rapidly than anticipated.
The fourth-quarter results reinforce the notion that GM will need multi-billion dollar government assistance to continue as a going concern, said Efraim Levy, a Standard & Poors analyst, in a note to investors.
GM ended the year with $14 billion in cash, down from $27.3 billion a year earlier. The latest figure included the initial installment of $4 billion in U.S. loans. The company told Congress in December it needed at least $11billion to $14 billion to operate normally. Revenue in the fourth quarter fell 34.2 percent to $30.8 billion.
GM shares today closed at $2.38 a share, down 17 cents or 6.7 percent on the New York Stock Exchange.
The $30.9 billion net loss for 2008 was the second-highest in GMs 100-year history.
CFO Ray Young said the rate of GMs cash burn accelerated in the fourth quarter because the global downturn was worse than GM anticipated. He called the $5.2 billion drain fairly sizable.
Declining auto demand, especially in previously healthy developing economies, pushed GM to reduce production late in the quarter.
When you make production cuts in December, you lose the revenue but you still have supplier payments, Young said in a conference call today.
He said GM will reduce the cash burn of 2009 below the amount consumed in 2008. The burn rate will be steepest in the early months.
In GM's last earnings report in early November, the company said it was close to exhausting its cash supply after burning through $4.8 billion in the third quarter. The automaker then petitioned Congress for help, was rejected by the Senate and bailed out by lame-duck President George W. Bush.