GM is free of bankruptcy woes and back on top, reports Reuters. Reuters accounts that GM documented $ 2 billion in profits for the third-quarter, with an earnings per share increase of $ 1.20. This turn of success has spurred the recently bankrupt automaker toward an first public offering of stock options by in the near future.
GM $2 billion 3Q profit largest since bankruptcy
$2 billion in profits reported by GM is great. It is the best quarter since the bankruptcy in July 2009 that General Motors has seen. The profit margin has gone up since sales incentives were taken away and operating costs were lowered. Recent results certainly put a good shine on the automaker’s upcoming $13 billion IPO. The company predicts that 2010 as a whole will be profitable, the first time it has produced such results since 2004, writes Reuters.
The third quarter of 2010 is the 3rd consecutive quarter in which GM has increased cash earnings in North America. GM CEO Dan Akerson is concerned though since General Motors has been losing a lot in Europe while international sales have seemed to stop.
“We still need to fix Europe," he said in a statement. "We continue to be vigilant in reducing cost within the enterprise, and we have just started doing a better job in marketing our brands to consumers.”
Getting back to public investors
Slashing costs and setting up Europe for future growth are major elements of the sales pitch GM executives are offering to investors on the eve of the automaker’s IPO. The U.S. Treasury will own only 43 percent of the business rather than the current 61 percent with the common and preferred shares being offered.
Don't forget about the fourth quarter
GM’s fourth quarter should prove to be productive, as the Chevrolet Cruze compact could be introduced to compete against the Honda Civic and Toyota Corolla. The Cruze is expected to help General Motors significantly. Reuters writes that the automaker will stay at the top in the U.S. as a result of this. In the third quarter, Ford was the closest rival at $1.7 billion in profits, when at the other end of the scale, Chrysler posted an $84 million net loss.
Don't worry about automobile loan rates
FOX Business coverage of GM 3Q profit