With factories dark, GM profit slumps 88%; 2Q likely worse

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DETROIT (AP) — General Motors’ first-quarter net income fell 88%, but it still managed to make $247 million despite the arrival of the coronavirus pandemic.

U.S. automakers suspended production in much of the world in late March. That cut revenue for the quarter by 6% to $32.7 billion, which was better than expected.

During the past two months GM has canceled its quarterly dividend for the first time in six years, suspended share buybacks and drew $16 billion from credit lines to prepare for the pandemic.

The company also withdrew its financial guidance for the year.

The second quarter almost certainly will be worse than the first. GM has had little cash coming in ever since because automakers count revenue when vehicles are shipped from factories.

The Detroit automaker made 17 cents per share even though its factories in North American have been closed since March.

Excluding one-time items, the automaker made 62 cents per share, much better than the per-share earnings of 40 cents that Wall Street had expected, according to a survey by FactSet

GM expects to restart the majority of its factories in the U.S. and Canada on May 18. The company says it will take extensive safety measure to protect employees from the virus.

Its crosstown rivals, Ford and Fiat Chrysler, are likely to reopen their plants on the same day.

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