Reuters is reporting that General Motors Co. posted a first-quarter profit and the company said it is making progress toward a turnaround expected to put it on track toward its first full-year profit since 2004.
Chris Liddell, GM’s chief financial officer, said the first-quarter results showed that the top U.S. automaker was making progress and had a “good chance” of turning a full-year profit. He declined, however, to offer any forecast for the remainder of the year and said that while an initial public offering was possible over the next year, the timing remained uncertain.
“Now that we have achieved profitability, the next step is to achieve sustainable profitability,’ Liddell told reporters at GM’s Detroit headquarters.
GM received US$50 billion in government financing for its restructuring in bankruptcy and has been aiming to launch an initial public offering that would allow the U.S. government to reduce its majority stake in the automaker later this year.
Revenue rose to US$31.48 billion from US$22.43 billion in the pre-bankruptcy GM a year before. Net income — after preferred stock dividends of US$203 million to the U.S. and Canadian governments and GM’s major union — was US$865 million, compared with a loss of US$5.98 billion a year before.
Under the terms of GM’s restructuring, almost 61 per cent of the automaker is owned by the U.S. government. Canada and the province of Ontario own nearly 12 per cent.
GM posted a US$4.3 billion loss in 2009 for the period between July when it emerged from a bankruptcy steered by the Obama administration, until the end of the year.
The results underscore the progress GM has made in slashing costs by reducing debt, cutting jobs, closing factories and dropping unprofitable brands like Hummer, Saab and Saturn. GM now relies on four core brands — Chevrolet, Buick, GMC and Cadillac.
Analysts have said GM still faces steep challenges in repairing the reputation of its brands in its home market and reversing a long-running slide in market share.