GM Has $ 2 Billion 3Q, Initial Public Offering Seems Gold
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General Motors is free of bankruptcy woes and back on top, reports Reuters. 2 billion dollars in third-quarter earnings (and a $ 1.20 earnings per share boost) back this up for GM. Thanks to this success, GM is optimistic that next week’s first public offering of stock will also trend well.
GM $2 billion 3Q profit largest since bankruptcy
Since emerging from bankruptcy in July 2009, $2 billion in profits is one of the most successful quarter General Motors has had. When sales incentives were no longer used, the profit margin was able to go up. It also helps that the operating costs have lowered. These great results will certainly help the $13 billion IPO. It is much more likely to happen now. The business predicts that 2010 as a whole could be profitable, the very first time it has produced such results since 2004, writes Reuters. This is the third consecutive quarter in 2010 where cash earnings in North America have increased. This is within the third quarter of 2010 of course. International sales have been flat, however, and GM has seen some significant losses in Europe that have the attention of General Motors CEO Dan Akerson.
“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.”
The investor road show is under way
The automakers IPO has caused General Motors to cut costs and get Europe ready for a future growth market as part of a sales pitch. 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.
The fourth quarter
GM’s fourth quarter should prove to be productive, as the Chevrolet Cruze compact can be introduced to compete against the Honda Civic and Toyota Corolla. The Cruze is expected to help General Motors substantially. Reuters writes the automaker will stay at the top in the U.S. as a result of this. There had been a $1.7 billion profit made by Ford within the 3rd quarter getting them into second place. Chrysler on the other hand had an $84 million net loss putting it at the end of the line.
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Citations
ABC News
abcnews.go.com/Business/wireStory?id=12106358
FOX Business coverage of GM 3Q profit
youtube.com/watch?v=GcEekJp6490
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