GM Posts $3.25 Billion Loss, Analysts and Investors Cheer

General Motors posted a $3.25 billion loss for the first quarter, a loss acquired in a multitude of creative and interesting ways. The following is a direct quote from the Reuters link "GM on Wednesday posted a first-quarter loss due to a costly supplier strike, waning demand for its most profitable vehicles and charges related to struggling former subsidiaries, although results beat Wall Street expectations." In summary, costs rose, revenues declined on lack of demand, and it had to take huge charges on its investment in GMAC, the finance unit. Perhaps the market is cheering that GM only owns 49% of GMAC having spun the balance off to Cerebrus Capital in a very well-timed move in 2006. That spin-off was initially orchestrated to protect GMAC's credit rating from GM's deteriorating financial situation, since GM cannot sell cars without offering financing to its customers. Ironically, GM has stabilized somewhat, while GMAC has been dragged down by its residential mortgage lending unit. Perhaps the market is celebrating the fact that GM's overseas sales were better than expected, although I'm certain this was due mostly to a weak dollar. Whatever the reason, GM is up on the news. Maybe by the end of the day, investors will notice that beating analysts estimates of some "core earnings excluding everything" number that may not even include car sales, is really not such a lofty achievement.