NEWS: Report: General Motors Earns $1.74 Billion, Most Profitable Q1 in 11 Years

May 4, 2011
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There may be some good news in store for General Motors -- and, perhaps more importantly, its stakeholders. After posting increased sales figures for the month of April, analysts now believe the automaker could have its most profitable first quarter since 2000. How profitable? Many predict the company could post a net profit to the tune of $1.74 billion.
While GM’s quarterly results won’t be released until tomorrow, analysts are confident that we can expect a 63-percent rise in earnings from the company over the $1.07 billion in the first quarter of last year. That would make Q1 2011 General Motors’ most profitable first quarter in 11 years, and the fifth consecutive quarter of profitability since its 2009 bankruptcy.
In the past month, all of GM’s four brands saw sales increases ranging from 16.0- (Cadillac) to 51.2 percent (Buick). Although much of the product from Chevrolet, Buick, GMC, and Cadillac is relatively new, many of the automaker’s sales were buoyed by incentives. That may be somewhat worrisome, but Automotive Newssuggests that the sheer volume of sales offset the cost of the incentives. In the first quarter, GM sold 592,545 vehicles in the U.S. alone
It is also expected that GM will have the most to gain from the production lost by Japanese automakers due to the March 11 earthquake and tsunami. Wall Street traders are listing GM stock as a buy, but telling current shareholders not to sell until it hits the expected target of the high-$40 range near year-end. At that time, it’s expected that the U.S. Treasury will also begin to sell off some of its 33-percent stake.
Source: Automotive News (Subscription required)

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