Gm Posts $1.33 Billion Profit

[P71_CrownVic]

DETROIT – General Motors Co. said Thursday it made $1.33 billion in the second quarter, a sign it's getting healthier as it prepares to sell stock to the public.

 

It was the second straight quarterly profit for GM, which made $865 million in the first quarter.

 

CEO Ed Whitacre said last week that the company is eager to sell shares in an initial public offering so it can end its dependence on the government and pay off $43.3 billion in bailout funds that were converted into a majority stake in the company.

 

Whitacre said the company plans to file paperwork in the near future for the IPO. But it's unclear if the recent record of profits — $2.2 billion for the first half of 2010 — is enough to convince investors. GM lost $88 billion in the five years before it filed for bankruptcy protection last June.

 

GM's second-quarter revenue totaled $33.2 billion, up 5.3 percent from the first quarter on growing sales in every region except Europe. In the U.S., GM saw strong sales of new and redesigned models like the Chevrolet Equinox wagon and Buick LaCrosse sedan.

 

GM said it earned $2.55 per share for the quarter. GM didn't report second-quarter results last year because it spent part of the quarter in bankruptcy protection, but on Thursday, GM said it lost $12.9 billion in the second quarter of 2009, or $21.12 per share.

 

So far, GM's results are a reversal of fortune from 2009, when it lost $4.3 billion from July 10, the day it exited bankruptcy court, through Dec. 31. Before the first-quarter results, GM hadn't reported a profit since the second quarter of 2007.

 

GM said it ended the quarter with $32.5 billion in cash, down from $36 billion in the first quarter.

 

GM has been working to streamline operations and slash costs. It has shed four brands, changed leadership and last week announced its U.S. dealership network would number 4,500, about 25 percent smaller than it was in early 2009.

 

But it still faces hurdles. GM's U.S. sales rose 14 percent in the first six months of this year compared to the same period in 2009, according to AutoData Corp. That was slightly less than the average industry increase of 17 percent. GM had the highest incentive spending of any major automaker at $3,691 per vehicle, almost $1,000 more than the industry average, according to Edmunds.com.

 

GM has also relied heavily on sales to rental-car, government and corporate fleets, which are less profitable than sales to individual customers. Retail sales — or sales to individuals — were up 11 percent industry wide through June, but up only 1 percent at GM.

 

GM is the last of the Detroit automakers to report second-quarter results. Ford Motor Co. made $2.6 billion, its fifth straight quarterly profit. Chrysler Group LLC, which got $15.5 billion in federal aid, narrowed its second-quarter loss to $172 million.

 

The U.S. government has owned a 61 percent stake in GM since the company left bankruptcy protection.

 

"We want the government out. Period," Whitacre said during an auto conference in northern Michigan. "We don't want to be known as Government Motors."

 

GM has already paid $6.7 billion in government loans. Whitacre said GM wants to sell its stock all at once, rather than in batches, which would end the government's ownership more quickly.

 

But the U.S. government and GM's other stakeholders — a United Auto Workers health-care trust, which owns 17.5 percent of the company; the Canadian government, which owns 11.7 percent; and old bondholders, who own 9.8 percent — will ultimately decide how much of their equity to sell.

 

A GM IPO could be the largest such sale in U.S. history. It would have to bring in $70 billion to pay back all of GM's stakeholders; some analysts expect the IPO will be worth at least than much. That would be more than Ford's market value of roughly $44 billion, but less than the total value of Toyota's shares of about $113 billion.

 

It would also dwarf a 2008 offering by Visa Inc. that netted nearly $18 billion.

 

GM is taking steps to boost its U.S. sales. In July the company said it would buy AmeriCredit Corp., an automotive financing company that serves the subprime market, for $3.5 billion. Though it was partners with Ally Financial Inc., formerly known as GMAC, GM previously lacked a so-called captive financing company, which can offer better rates to customers than outside financial sources.

 

GM also has several new vehicles in the pipeline. Its new Chevrolet Cruze, due out next month, is GM's latest bid to make a desirable — and profitable — small car. Later this year, the company will begin selling the Chevrolet Volt, a $41,000 electric car with a small gas engine that extends its range.

 

SUCK ON THAT HATERS!!!!!!!!!!!!!!

 

Link-Yahoo

 

Now the Volt isn't bothering me as much. The loans are paid off, money is pouring in, and great, class leading products are being developed.

 

I think GM shed a lot of the Volt development costs in C. 11...

[truckofwinandawesome]

SUCK ON THAT HATERS!!!!!!!!!!!!!!

 

Link-Yahoo

 

Now the Volt isn't bothering me as much. The loans are paid off, money is pouring in, and great, class leading products are being developed.

 

I think GM shed a lot of the Volt development costs in C. 11...

 

the Only Gripe I have about the volt is that the Nation as a whole won't see it until 2012! basically ,the Tree Hugging States get it first, and the rest of the nation gets screwed for 2 years!

[Luvbelly]

I am not sold on pure electric or hybrid vehicles. They may save you some gas but really don't save much if any money. One cost most people never think about is battery replacement. Every battery has a usable lifespan so someone is going to get stuck with a nice little bill at some point. It may not be an issue for the original owner depending on how often they trade but it will be for someone. I am more impressed with cars like the new Fiesta. It returns near Hybrid MPG at a lower cost and with known technology. I truly believe there is still hope for and a future with the good old internal combustion engine. I hope GM shares this sentiment. I am probably in the minority though.

[[email protected]]

It's not cash in my pocket, so I don't give a rat's ass. Just my 2 cents.

[lbkthree]

It's progress but they still have a ways to go. As for the volt, let the tree hugging states have it first. I have my truck and I'm eyeballing a new camaro. Makes no difference to me.

[chakis24]

nice. too bad whitacre is stepping down in september. i like his attitude and hes done a good job bringing the company back on track.

[Daryl LBZ]

It's progress but they still have a ways to go. As for the volt, let the tree hugging states have it first. I have my truck and I'm eyeballing a new camaro. Makes no difference to me.

 

 

 

 

Looks like you feel the same way I do lol!

[unit731]

Sorry folks.

 

The stats are just not there.

 

The actual sales increase for consumer buyers was a measely 1% over last year sales.

 

The claimed sales were . . . you guessed it to fleet sales (Rental car companies) and to . . . government sales (fleet).

 

Not as good of news - once you get into the nitty gritty of the sales figures.

[DTyrrell]

1% increase is better than a 1% decrease in sales.

[gm88]

SUCK ON THAT HATERS!!!!!!!!!!!!!!

 

Link-Yahoo

 

Now the Volt isn't bothering me as much. The loans are paid off, money is pouring in, and great, class leading products are being developed.

 

I think GM shed a lot of the Volt development costs in C. 11...

 

the Only Gripe I have about the volt is that the Nation as a whole won't see it until 2012! basically ,the Tree Hugging States get it first, and the rest of the nation gets screwed for 2 years!

 

 

I think of it this way: let the tre hugger get it first and pay the big $$$ for it, then by the time it gets to the rest of the nation, hopefully the tech will have been paid for and the price will have come down somewhat

[P71_CrownVic]

Sorry folks.

 

The stats are just not there.

 

The actual sales increase for consumer buyers was a measely 1% over last year sales.

 

The claimed sales were . . . you guessed it to fleet sales (Rental car companies) and to . . . government sales (fleet).

 

Not as good of news - once you get into the nitty gritty of the sales figures.

 

GM didn't rely on fleet sales NEARLY as much as Ford and Chrysler did from January to July...

 

Fleet as percentage of U.S. sales, Jan. through July

 

Chrysler Group 39%

Ford Motor 35%

General Motors 31%

Hyundai brand 16%

Nissan North America 15%*

Toyota Motor Sales 9%

American Honda 2%*

[GMSatan]

"SUCK ON THAT HATERS!!!!!!!!!!!!!!"

 

You my friend, need a life. Only person who is a hater on this forum, is you.

[P71_CrownVic]

"SUCK ON THAT HATERS!!!!!!!!!!!!!!"

 

You my friend, need a life. Only person who is a hater on this forum, is you.

 

I'm not a hater...I like GM. And I do have a life...kthxbye.

[GMSatan]

Sorry folks.

 

The stats are just not there.

 

The actual sales increase for consumer buyers was a measely 1% over last year sales.

 

The claimed sales were . . . you guessed it to fleet sales (Rental car companies) and to . . . government sales (fleet).

 

Not as good of news - once you get into the nitty gritty of the sales figures.

 

It is actually a very bad report with lots of lipstick on the pig when you crunch the numbers. Actually, it is another big loss when you factor in billions spent to make the 1.33 billion. Until GM can purchase back GMAC there will be no big turnaround. The main reason Ford is posting big number is because they still own FMC & are financing more less than prime customers that GMAC is turning down. GM has no control over GMAC & it is costing them big. GM just purchased another finance company but it is not the long term solution or even a short term solution at this time as they are not loaning yet.

 

The good news, this is going to push the stock price down if they decide to pull the trigger sooner than later. There is talk of it being delayed with the poor results we are seeing now. I will be a buyer when the right entry point is reached. GM & Ford stock have made me some good money over the years.

 

"The federal government got a 61 percent stake in GM in exchange for $43 billion in aid to keep it alive."

 

How much of this 1.33 Billion was made as interest and investments off the goberment hand out of $43 billion it recieved and has yet to pay back?

 

 

^

 

Answer that, Mr. GM.

[P71_CrownVic]

Answer that, Mr. GM.

 

The Government bought something with money. What a crazy concept!

 

Sell your Caddy and buy a Navigator troll.

 

How come you have decided to not login under your "Punmax" username??