GM Posts $2.5 Billion Q2 Profit
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DETROIT (WWJ) – General Motors earned $2.5 billion in the second quarter. That’s the company’s sixth consecutive quarterly profit, and an increase from the $1.3 billion they made in the second quarter last year.
“GM’s investments in fuel economy, design and quality are paying off around the world, as our global market share growth and financial results bear out,” said CEO Dan Akerson in a statement released by the company.
General Motors made money in all regions of the world, but the bulk of the profit came from North America.
“It’s a solid quarter,” said GM Chief Financial Officer Dan Ammann. “We’re pleased with the results. It’s one step forward along in our goal of sustained performance.”
There were no special items to adjust for in this report.
General Motors ended the quarter with liquidity of $39.7 billion dollars.
Ammann told WWJ AutoBeat Reporter Jeff Gilbert that GM expected to continue making money in the second half of the year.
“We see the second half of the year profitability being modestly lower than the first half, based on the current industry outlook. We still continue to see, as we said in the first quarter, solid improvement in year over year profitability.”
GM’s earnings were much better than analysts expected.
“GM sales outpaced the industry sales growth in the second quarter (11.2% vs. 6.5%), indicating the underlying strength of their product lineup,” said Jesse Toprak, Vice President of Industry Trends and Insights at TrueCar.com, in a statement. “The outlook for GM remains positive for the rest of 2011, based on the expected overall recovery in new vehicles sales as well as the seasonality favoring GM’s more profitable larger vehicles.”
General Motors is hoping that this report gives a boost to its stock, which has been languishing well below the $33 a share that it launched at last fall. Today’s earnings work out to $1.54 a share.
“Well its really our job to put up the operational and financial results as we have this quarter, and as we hope to continue to do going forward,” said CFO Dan Ammann. “If we keep doing that, the stock price will look after itself.”
The federal government is also hoping that GM gets a boost on Wall Street, as it prepares for a second sale of stock, to end the government’s involvement in the company. The Treasury Department still holds 500 million shares of General Motors.
No announcement has been made on when that second stock sale might be. There had been some expectation that the government was waiting for this earnings report. But there are also indications they may not announce a new sale of stock until the fall, after General Motors completes its negotiations with the UAW.