News & Reports News Year 2010 November , 2010 Automakers GM posts $1.2 billion Q3 profit

Automakers GM posts $1.2 billion Q3 profit


13november2010-7
US automaker General Motors (GM) has reported robust earnings as it prepares for a public stock offering and a gradual breakaway from government ownership.
The GM posted a third quarter profit of two billion dollars on Wednesday, celebrating a major revamp of GM's product portfolio and the US auto industry's recovery from a record decline, AFP reported.

The company attributed the jump to exceptional sales in the North American market, highlighting a 33-percent rise in production from its US factories. It also reported a relatively flat international operation, with China sales up 13 percent in the third quarter.

GM chief executive officer Dan Akerson acknowledged the need for more work and to “be vigilant in reducing costs in the enterprise.”

But GM's efforts to cut costs, increase global market share and focus on "a clear, simple vision to design and sell the world's best vehicles" are paying dividends, he said.

The third quarter growth equals earnings of USD 1.20 a share and brings GM's profits for common shareholders to USD 4.2 billion for the first nine months of 2010.

The embattled automobile giant warned of "significantly lower fourth quarter results partly due to a USD 700 million charge related to buying back USD 2.1 billion in shares from the US government.

General Motors underwent a government-financed restructuring under bankruptcy protection on July 10, 2009 and posted a USD 4.4 billion loss for the rest of that year.

The Detriot-based company is now preparing for an initial public offering scheduled for next week, when it hopes to raise USD 13 billion to reduce its 61-percent government ownership. The largest large offering on record includes 365 million shares priced at between USD 26 and USD 29 per share.

Once the world's largest corporation, General Motors sold more vehicles than any other car factory from 1931 through 2007, a position now taken by Japan's Toyota.

The White House said last week it was confident that GM would pay back the entire USD 50 billion of tax-payers' money invested in the company to bail itself out.