[ad#post_ad]Today General Motors announced its first quarter results. The company said it had earned $865 million in the quarter on revenue of $31.5 billion. In the same quarter last year, prior to bankruptcy, they instead lost $6 billion on revenue of $22.4 billion.
Today's announcement indicates the first quarterly profit GM has made since 2007.
Based on a free cash flow of $991 million, GM now has $35.7 billion in cash.
Worldwide sales increased 24% to 1.9 million vehicles, including a 15% rise in US market sales, and 45% increase in international sales including China.
“We’re pleased with our first quarter performance, in particular achieving profitability,” said Chris Liddell, vice chairman and chief financial officer. “In North America we are adding production to keep up with strong demand for new products in our four brands. We’re also steadily growing in emerging markets, keeping our costs under control, generating positive cash flow and maintaining a strong balance sheet. These are all important steps as we lay the foundation for a successful GM.”
Continued profit at GM is expected to lead to an IPO possibly later this year. The US government is reported to have hired a firm to help with this process. Through the IPO the government will be able to divest its $50 billion ownership by selling its shares to the public.
So now with fewer brands, better products, lower wages, and profitability GM is poised for success in the future.
Furthermore profitability now makes GM eligible for advanced technology retooling loans. GM had applied for $14.4 billion in these loans which would be used to restructure facilities to build high efficiency cars like the Volt and other future models.
Source ( CNN )