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GM Posts Best Quarter In Years, Buoyed On U.S. Product

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General Motors [NYSE: GM] is proving that it's truly back in the black. For the fifth straight quarter since emerging from bankruptcy, it posted a net income. In fact, it's not just GM's best financial performance since the 2009 bailout; it beats the company's results for many years prior.

For the first quarter of 2011, the company's net income was $3.2 billion; and even considering its sale of Delphi Automotive, it earned about $2 billion—more than double the $865 net income for the same period in 2010. Earnings per share have more than tripled since the first quarter of 2010, too.

GM is anticipating that profits will improve over the rest of the year, thanks to newer vehicles with a more favorable pricing structure and cost cuts. Revenue has grown by $4.7 billion (15 percent), to $36.2 billion—despite rising commodity costs and, in general, the shift to cars from GM's longtime light-truck profit base.

At the heart of these improvements—if you don't count the legacy obligations that bankruptcy freed the company of—are that the automaker's product line has been thoroughly recast with the introduction of a number of smaller, more fuel-efficient passenger-car models such as the 2011 Chevrolet Cruze. Its 2012 Buick LaCrosse will come standard with a eAssist mild-hybrid system that yields 37 mpg highway, and both an all-new 2012 Chevrolet Sonic small-car later this year and a completely redesigned 2013 Chevrolet Malibu lineup next year should help continue the automaker's focus on that part of the market.

GM remains one-third owned by the U.S. government. Last month, sources within the Treasury Department revealed that the federal government is planning to sell its stake in the automaker soon after its IPO lock-up expires—which would be late this month.

The strong U.S. performance was enough to offset a slightly lower performance for GM elsewhere in the world. In Europe, the company posted a pre-tax-and-interest $390 million loss; it posted profits in China and South America, but in both the numbers were down versus a year earlier.

"GM has great potential to deliver profitable growth around the world as the recovery continues," said Dan Ammann, senior vice president and CFO, in a release accompanying the results. "While we're encouraged, we keenly recognize we have more opportunities to leverage our scale, improve spending and investment efficiencies, and optimize our strong balance sheet."

[AutoWeek; General Motors]

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Comments (4)
  1. Another feather in Obama's hat. No one can tell me that saving GM was a bad decision now... and we the taxpayers got most of the money back. It would have been sad to see it in Chinese hands. Gov't Motors all the way!

  2. And GM is not paying a dime in taxes, we were already screwed over during the bailout and that obviously still continues.

  3. @Jim - Are you claiming that GM doesn't pay their share of employment and employee entitlement taxes (the other 9%) that your grandma lives of off? Are you insane? And how did you get screwed? You probably don't even pay taxes yourself (bottom half has no Fed tax liability), so what are you complaining about? We got the money back and 1/3 of the ownership will be offered to the investors any day now. I'm glad we kept the jobs that GM is required to pay taxes on (it's not just profit that gets taxed), didn't give up the brand to the thieving Chinese, and the only people getting screwed are the ones who actually pay taxes and that money is getting wasted building foreign infrastructure and supporting 200+ military bases overseas.

  4. Exactly how did we "get most of the money back" when there are hundreds of articles recently about exactly how much money "Treasury" is going to lose by selling off their shares in GM before 2012?
    Spin it how you want, GM was a sink hole for the U.S. Taxpayer. Despite the recent "profits" they aren't out of the woods yet.
    Call back in 3-5 years, tell us how it's going. See "Cruze" recalls for hints.

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