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Title: General Motors Reports $2-Billion Profit On Eve Of IPO
Source:
USA TODAY
URL Source: http://content.usatoday.com/communi ... billion-profit-on-eve-of-ipo/1
Published: Nov 10, 2010
Author: USA TODAY
Post Date: 2010-11-10 11:21:34 by Brian S
Keywords: None
Views: 2860
Comments: 3
General Motors posted a $2-billion Q3 profit on revenue of $34.1 billion in its last financial report before it hopes investors will snap up its shares in the planned Nov. 18 return to the stock market. GM's international region, which includes the hot Asian market, posted a $646-million profit, down slightly from last quarter, but GM's troubles in Europe got worse: It lost $559 million, compared with $160 million in the second quarter. With its third profitable quarter in a row, GM is trying to reassure potential investors that the problems that led to four years of losses -- a staggering $82 billion total -- before its 2009 bankruptcy have been fixed -- with the help of a $50 billion federal bailout and government-supervised bankruptcy that has left taxpayer owning nearly 61% of the company. Taxpayers may not get it all back in the IPO and subsequent stock sales, but "eighteen months ago, nobody expected any taxpayer money to get paid back," said Rebecca Lindland, an analyst with IHS Automotive. GM's worldwide market share in the quarter slipped from 11.8% a year earlier to 11.5%. That's mostly due to a one-point market share loss in North America, where GM has sold or wound down four of its eight brands. More details: GM's operations generated $2.6 billion in cash. After capital expenditures of $1.2 billion, free cash flow was $1.4 billion. The quarterly earnings nearly match GM's profit from the first half of the year, along with the $2.1-billion quarterly profit Ford has averaged so far this year. Ford gained $6.4 billion in through September, compared with GM's $4.2 billion. GM posted profits of $865 million in the first quarter and $1.3 billion in the second. GM said its fourth-quarter earnings before interest and taxes would be lower than each of the first three quarters. The automaker had previously said that was due to a different production mix, the cost of launching new vehicles such as the Chevrolet Cruze and Volt and higher engineering expenses. The automaker has said annual profits will continue. Chief Financial Officer Chris Liddell said last week in an online investor video GM will be able to make $11 billion to $13 billion before interest and taxes in a moderate sales year and $17 billion to $19 billion when sales are at their peak. That's largely because GM's bankruptcy restructuring lowered its break even from at least 15.5 million in U.S. sales to sales of 10.5 million to 11 million vehicles, Liddell said. U.S. light-vehicle sales totaled 10.4 million in 2009 but were often in the 16 million range before the recession. In the initial public offering next week, the U.S. Treasury is selling about a third of its 61% equity stake in GM at a loss. The government is hoping the stock's value rises enough in the future to allow taxpayers to break even on the total investment when it sells the rest of its shares.
The overall net profit -- before interest expenses and taxes -- came mostly came from a $2.1-billion profit in North America, up from $1.6 billion in the second quarter and $1.2 billion in the first quarter, according to a report from colleague Chrissie Thompson of the Detroit Free Press.
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#1. To: Brian S (#0)
if it weren't for socialism GM would be out of business and tens of thousands more lazy americans could be moving south to pick fruit.
Indeed. Just think of the tens of thousands actually on a payroll and paying taxes into the system versus drawing unemployment/welfare funds. How dare they!
Never swear "allegiance" to anything other than the 'right to change your mind'!
Just more impacts of socialism. Things were so much better before Obama when we were losing 700k jobs a month.
On January 3, 2011 the GOP assumes responsibility for deficit spending.
#2. To: go65 (#1)
#3. To: Brian S (#2)
Indeed. Just think of the tens of thousands actually on a payroll and paying taxes into the system versus drawing unemployment/welfare funds.
On January 3, 2011 the GOP assumes responsibility for deficit spending.
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