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Mmm, we love the smell of fresh earnings in the morning. And when those earnings are GM, it smells red ink. Lots and lots of one-time red ink. But also some adjusted black ink. Let's parse the numbers.

The General reported a net loss of $3.2 billion, or $5.62 per share, for the second quarter of 2006 compared with the loss of $987 million, or $1.75 per share, last year at the same time. But that net loss includes the huge $4.3 billion, or $7.66 per share, in special items reflecting charges like the buyouts of 34,400 early employee retirements (that's a whopping $3.7 billion of that $4.3 billion number) and some other unrelated crap like selling GMAC and some "restructuring charges."

But there's some good news here because Wall Street only really cares about adjusted net income right now — and that's the numbers GM shows if you pretend that $4.3 billion loss doesn't really exist. That kind of makes sense, because the losses are from "one-time" costs and shouldn't happen again. But wait, if GM took a one-time charge of $4.3 billion and only showed a net loss of $3.2 billion, that means there must have been some money made to bridge that gap between the two numbers. Well, it's the $1.2 billion, or $2.03 per share, adjusted net income. That's a huge increase from the year-ago adjusted loss of $231 million...

...or $0.41 per share. Even more amazing is GM showed a record level of revenue this quarter — $54.4 billion! But as we already said — what's most important is it blows Wall Street estimates (around $0.53 to $0.88 a share) so far out of the water it's not even funny. Sounds like Rick's making a damn good case for why he's the man, and his turnaround effort's the thing.

There's some other important crap in the press release but we're still translating from GAAP-speak.


Holy Restated Earnings! GM's Back In Black With A First Quarter Profit Shift [internal]