GM Announces Third Quarter Profit of $2 Billion

The best way to win potential investors over on a forthcoming public option, it seems, is to post some impressive fiscal numbers. Although General Motors has gained strength since emerging from bankruptcy, its third quarter results — a profit of $1.959 billion — will likely help sell next week’s IPO.

That’s a big swing from the same period last year, where GM posted a staggering $1.2 billion loss. GM reports it earned roughly $1.20 per share, a nice contrast to the $0.73 per share loss it reported in Q3 2009.
“As demonstrated by our third consecutive quarter of profitability and positive cash flow, these results continue our significant progress,” said Chris Liddell, vice chairman and CFO, in a prepared statement.
This quarter’s return is aided in no small part by $34.1 billion in gross revenue, roughly 21 percent better than what the company earned in the third quarter of 2009. Earnings were largely driven by GM’s North American operations, which raked in $2.13 billion before taxes. Not only is that an improvement of $500,000 over the second quarter of 2010, but it’s also GM North America’s third consecutive month of profitability.
Overseas, the picture isn’t quite as rosy. GM’s International Operations, which includes Asian, South American, and African markets, raked in a $646 million pre-tax profit, which is down roughly $26 million from the second quarter of 2010. Predictably, GM’s European operations, including the beleaguered Opel, posted a $559 million loss for the quarter. In contrast, the same group lost $160 million in Q2 2010, and $477 million in the first quarter of this year.
Will the momentum continue? GM thinks it’s on track to post (at the very least) a pre-tax profit in the fourth quarter of 2010 and remain profitable for the entire year. Fourth quarter earnings, however, may be a little slimmer, thanks in part to the costs incurred in launching new models — especially the tech-laden 2011 Chevrolet Volt.
Source: GM, Wall Street Journal


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