And This Makes Sense How?

General Motors Corp. lost $3.2 billion in the second quarter because of heavy charges for layoffs and early retirements -- part of its massive restructuring program.

$3.2 billion dollars! And the stock was up 5% on the news. How is that possible? (Well I know, but I still think its crap) Now hold on for a second the $3.2 billion loss is income according to GAAP (accounting rules), so of course we have to give the company the benefit of the doubt and allow them to adjust the numbers. So they give us General Motors accepted principles. So here is what they did:

Without one-time items, GM said it earned $1.2 billion, or $2.03 per share. That was significantly ahead of the 55 cents per share forecast in a survey of Thomson Financial analysts.

Now before I go into this for a moment, I would like to quantify the amount of money GM has reported as a loss for the last year and a half: Now this is just a ballpark figure but it is roughly $12.4 billion dollars. That is a huge, huge amount of money. If anyone has ever heard of big bath accounting I feel like our boys at the GM may be making use of this tactic, ohh and this has been a 5 quarter long big bath. This has allowed the company to write down assets, fire people, "restructure" and take the entire hit in the current period while leaving future periods free and clear. The only problem with this is, the underlying business is still incredibly weak. The only thing that has changed is perception.
Here is a list of some of the other negatives that didn't get any play today:

The Delphi issue which has the potential to cripple the company.
Vehicle deliveries are down from 2600 to 2400.
Market share down from 15.1% to 13.8%.
They also have sold off their most profitable division GMAC...great long term play (note sarcasm here).
They earned a NEGATIVE gross margin in their automotive division.

Bottom Line: This company has insanely complicated financials, probably more so than the individual investor should ever concentrate on. They are not doing anywhere near as well as the stock price says. If I owned it, I would keep it on a tight leash and probably take some small profits from today. You couldn't get me to buy it up here, but shorting it is too aggressive at this juncture. Too much momentum.

Credit AP: http://biz.yahoo.com/ap/060726/earns_gm.html?.v=31 for the early quotes.