General Motors Corp posted its largest quarterly net loss on Wednesday, reflecting a $39-billion charge related to unclaimed tax credits and a loss at its former finance subsidiary GMAC.
The largest U.S. automaker posted a third-quarter net loss of $39 billion, or $68.85 per share, compared with a loss of $147 million, or 26 cents per share a year earlier.
Total revenue fell to $43.8 billion from $48.9 billion a year earlier.
Excluding one-time items, GM reported a net loss of $1.6 billion, or $2.80 per share.
GM's shares fell 7 percent to $33.50 in premarket trading, down from Tuesday's close of $36.16 on the New York Stock Exchange.
The stock has lost almost 20 percent from its October highs when GM clinched a cost-saving labor deal with the United Auto Workers union.
In advance of the quarterly results, GM had said it would book a $39 billion noncash charge for the quarter.
The automaker said that record one-time charge against deferred tax assets was triggered by its cumulative losses over three years and the risk of both weaker auto sales and GMAC results in coming quarters.
GM's charge was triggered largely because it has been three years since it began taking charges to restructure its troubled U.S. operations. The move wipes out all the deferred tax credits it accrued over that time.
Yet accounting rules would still allow GM to claim those credits if it bounces back to profitability, and can use the amounts to offset future taxes, GM Chief Financial Officer Fritz Henderson told reporters Wednesday.
Nothing has changed in terms of the economics of the business, he said.
GM's results, even excluding the massive one-time charge, were weaker than analysts had forecast.
Wall Street analysts, on average, had forecast an adjusted quarterly loss of 36 cents per share, according to Reuters Estimates.
That shortfall partly reflected losses at GM's North American and European operations and a loss at finance company and former GM subsidiary GMAC, Henderson said.
GMAC, in which GM retains 49-percent stake, posted a $1.6 billion third-quarter loss last week triggered by a fourth consecutive quarter of losses at its Residential Capital LLC unit, the second-largest independent U.S. mortgage lender.
Henderson said weakness in the U.S. housing market is partly responsible for weaker auto industry sales, which are on track for their lowest annual total in almost a decade at about 16 million units.
Executives at GM rivals Ford Motor Co and Chrysler LLC have suggested the market could slide further in 2008, but Henderson declined to comment on future sales.
Despite being profitable in Asia Pacific and Latin America, GM posted a loss from continuing operations of $247 million in North America -- its largest market. GM also posted an adjusted loss of $90 million in Europe.
On a global basis, GM said its auto operations improved in the third quarter. The company posted net income of $122 million from continuing operations in the quarter, compared with a loss of $455 million on the same basis a year earlier.
Those results excluded Allison Transmission, a GM unit the automaker spun off in August. GM realized a one-time gain of $5.4 billion from that sale in its third-quarter results.