GM quarterly loss: $1.2 billion

General Motors Corp. reported another huge quarterly loss Wednesday, intensifying pressure on CEO Rick Wagoner to speed up the overhaul of North American operations that produced a $1.2 billion torrent of red ink in the second quarter.

A surge of U.S. vehicle sales in June when GM extended its employee discount plan to all customers helped the company reduce bloated inventories, but it added little to the bottom line. That highlights the challenge Wagoner faces as the world’s largest automaker tries to come up with new hit models while cutting costs in a way that doesn’t trigger open warfare with unions.

GM’s overall second-quarter loss was $286 million, or 51 cents a share, a dramatic reversal from the profit of $1.4 billion, or $2.42 a share, a year ago. It capped a dreadful first half of 2005, which included a $1.1 billion first-quarter loss, GM’s deepest in more than a decade. Second-quarter revenue fell 1.6 percent to $48.5 billion from $49.3 billion a year ago.

GM North America lost $1.2 billion versus earnings of $355 million in the second quarter of 2004. The culprits were lower production to compensate for growing inventories early in the year, a less favorable sales mix of cars to higher-margin trucks and SUVs, and rising health-care costs, which will approach $6 billion this year.

“Washington Mutual Inc., the nation’s largest savings bank, on Wednesday reported that its second-quarter earnings rose 73 percent from last year, driven by an improving home mortgage business and strength in other core operations.

The company said net income rose to $844 million, or 95 cents per share, from $489 million, or 55 cents per share, a year earlier.

The results topped Wall Street expectations for earnings of 83 cents per share, according to a Thomson Financial survey.

Washington Mutual also said its board approved a 1 cent increase in its quarterly dividend to 48 cents, payable Aug. 15 to holders of record on July 29.

“EBay Inc.’s second-quarter profit eclipsed analyst expectations as the online auction leader brushed aside worries that it may be losing its competitive edge.

The San Jose-based company said Wednesday that it earned $291.6 million, or 21 cents per share, for the three months ended in June, a 53 percent increase from $190.4 million, or 14 cents per share at the same time last year.

If not for accounting charges unrelated to its ongoing operations, eBay said it would have earned 22 cents per share. That topped the mean analyst estimate of 18 cents per share, according to Thomson Financial.

“AT&T Corp. nearly tripled its second-quarter profit to $307 million as lower depreciation costs offset another sharp revenue drop and costs from the long distance phone company’s deal to be acquired by SBC Communications Inc.

The profit reported Wednesday, amounting to 38 cents per share, compared with net income of $108 million, or 14 cents a share, during the same quarter in 2004.

Second-quarter revenues slid 11.5 percent to $6.76 billion, down from $7.64 billion a year earlier, as price competition, rival companies, cell phones and Internet-based calling continued to weigh on the long-distance voice and data business.

“The digital revolution dropped another bombshell Wednesday on Eastman Kodak Co.’s already beleaguered work force.

Even as Kodak speeds down the digital-photography highway, the picture-taking pioneer is struggling to cope with a sharper-than-anticipated drop in demand for conventional silver-halide film – its cash cow for the last century. Its solution: Ax 10,000 more employees.

The newest job cuts, on top of 12,000 to 15,000 targeted 18 months ago, coincided with the disclosure of a quarterly loss – its third in a row – and its stock dipped more than 5 percent.

It lost $146 million, or 51 cents a share, in the April-June quarter, compared with a profit of $136 million, or 46 cents, a year ago.

“AMR Corp., the parent of American Airlines, earned $58 million in the April-June period, while Continental Airlines Inc. posted a $100 million profit. Both carriers’ results exceeded analysts’ expectations.

AMR’s profit was equivalent to 30 cents per share, a significant improvement from last year’s net income of 3 cents per share, or $6 million. It beat the 15-cent-per-share estimate of analysts surveyed by Thomson Financial and was the company’s first net profit that did not include special items since the fourth quarter of 2000.

Second-quarter revenue at the Fort Worth, Texas-based airline rose 10 percent to $5.31 billion.

“Continental Airlines’ net income equaled $1.26 per share, reversing a year-ago loss of $28 million, or 43 cents per share. Excluding a gain from the contribution of ExpressJet Holdings Inc. shares to its pension plan, Continental said its adjusted income was $53 million, or 69 cents per share, in the latest quarter.

The company’s adjusted profit was well ahead of the average estimate of 20 cents per share from analysts surveyed by Thomson Financial.

Quarterly revenue totaled $2.86 billion, a gain of 12 percent from a year earlier.

“Allstate Corp., the No. 2 U.S. property and casualty insurer after State Farm, said Wednesday its second-quarter earnings increased 11 percent on double-digit gains in underwriting income and a mild quarter for natural disasters.

The results far outpaced Wall Street’s expectations.

Citing the lower-than-usual catastrophe losses so far this year, Northbrook-based Allstate also raised its guidance for 2005 operating earnings by 60 cents a share.

Earnings for the April-through-June period were $1.15 billion, or $1.71 per share, up from $1.03 billion, or $1.47 per share, a year earlier. Excluding investment gains and losses, operating earnings were $1.66 a share, or 15 cents higher than the consensus estimate of analysts polled by Thomson Financial.

“General Dynamics Corp., one of the nation’s largest defense contractors, said Wednesday its second-quarter profit grew 15 percent as strong sales helped the company beat Wall Street estimates. The company’s shares soared more than 4 percent in late trading to surpass the previous 52-week high.

Quarterly income rose to $345 million, or $1.71 per share, from $300 million, or $1.49 per share, a year ago. Earnings from continuing operations for the latest quarter were $344 million, or $1.70 per share.

Revenue increased 12 percent to $5.21 billion from $4.65 billion as the company’s core information systems and technology unit posted a 23 percent jump in sales. General Dynamics’ combat systems unit posted a 12 percent increase in sales.

Analysts surveyed by Thomson Financial expected lower continuing profit of $1.62 per share and sales of $5.08 billion.