GM earns $4.7B to post 1st profitable year since '04
2/25/2011
Full year net income at General Motors, which emerged from bankruptcy in 2009, was $4.67 billion on sales of $36.9 billion.
The company faces a bumpy road ahead: Gas prices are rising, GM has only a few new models, and its European operations are losing money.
Still, the automaker’s $4.7 billion profit for 2010 was impressive, especially considering where it has been. The company lost more than $80 billion in the five years before its bankruptcy and needed a government bailout to survive.
It emerged in the summer of 2009 cleansed of huge debt and costly labor contracts, returned to the stock market in November, and managed to make money even with auto sales near historic lows.
“I’m not sure anyone would have predicted a year ago that GM will deliver net income of $4.7 billion,” Chairman and Chief Executive Officer Dan Akerson said Thursday.
The annual profit, fueled by strong sales in China and the United States as the global auto market began to recover, gave GM its best year since 1999, when it made $6 billion at the height of the pickup truck and sport utility vehicle boom.
Sales rose to $36.9 billion, topping the $34.6 billion average estimate.
Net income was 31 cents a share. Excluding a charge related to a purchase of preferred shares from the Treasury Department, profit for the largest U.S. automaker was 52 cents a share.
With a good performance by GM this year, the U.S. government could recover more of its $49.5 billion bailout, nearly half of which has been repaid. And GM could even retake the title of world’s largest automaker, held by Toyota Motor Corp. since 2008.
GM sold 8.39 million cars and trucks worldwide in 2010, coming within 30,000 vehicles of unseating Toyota, which has been wounded by a string of safety recalls, including another big one Thursday.
Still, a spike in oil prices, a paltry lineup of new models because of research-and-development cuts made before bankruptcy, and losses in Europe could prove a drag on the automaker.
GM said profit-sharing checks for its 45,000 U.S. hourly workers will average $4,300, more than double the previous record for payout to unionized employees.
This report includes information from Bloomberg News.