US CARMAKER General Motors (GM) posted a $2bn (£1.24bn) third-quarter profit yesterday, driven by an accelerating turnaround in North America as it rushes to complete an initial public stock offering (IPO) set for next week.
The quarterly profit was the largest for GM since it emerged from bankruptcy in July 2009 and provides the last piece of financial data for investors evaluating the Detroit-based carmaker’s $13bn initial public offering due next week.
GM posted revenue of $34.1bn in the third quarter, and earnings per share of $1.20.
GM said it expected to post solidly profitable results for 2010, its first full-year of profit since 2004.
“It obviously will bode well for the IPO,” said Van Conway, chief executive at turnaround specialists Conway MacKenzie. “It’s more proof that they have executed the turnaround – I don’t say completely because I wouldn’t say that just a couple of quarters make [a turnaround].”
GM reported increased cash earnings in North America for a third consecutive quarter, with its international results flat to up slightly and a bigger loss in Europe.
“We know we have much more work to do,” chief executive Dan Akerson said in a conference call. “We still need to fix Europe. We continue to be vigilant in reducing cost in the enterprise, and we have just started doing a better job in marketing our brands to consumers.”
The carmaker’s IPO will include common and preferred shares and will allow the US Treasury to reduce its stake in GM from about 61 per cent to near 43 per cent.
GM executives have started an investor road show to support the IPO plans. Akerson and chief financial officer Chris Liddell did not take questions after a presentation on the results yesterday.
City A.M. Reporter