General Motors (NYSE:GM) lost about $800 million and burned through billions of dollars of cash in the second quarter in what is expected to be the worst three months of the year for the auto industry as the coronavirus pandemic shuttered factories and devastated sales.
GM’s results released Wednesday reflected a 34% drop in U.S. vehicle sales, which the company attributed to a drop in demand “due to the COVID-19 pandemic and tight dealer inventories caused by the production shutdown in the first and second quarters.”
GM’s loss is a sharp contrast to the $2.42-billion profit it made during the same three months last year. Revenue during the three months ended June 30 slid to $16.78 billion, a more than 53% drop from $36.1 billion during the same time last year.
However, the loss isn’t as bad as Wall Street feared and helped drive shares down by 7.5 cents in early Wednesday trading to $26.25.
On an adjusted basis, the company lost 50 cents a share while analysts expected the automaker to lose $1.77 a share.
The company burned through about $8 billion in cash during the quarter, a number that analysts and investors are closely tracking. GM said it expected to spend between $7 billion and $9 billion in the second quarter.
Of the Detroit automakers, GM was expected to be best positioned to weather a crisis as big as the coronavirus pandemic. For years, the automaker has aggressively cut costs and exited unprofitable markets, including Europe, to fortify its balance sheet.