General Motors posted its second straight profitable quarter Thursday, putting it in position to move ahead with the sale of shares to the public that is needed to repay taxpayer assistance it received last year.
The No. 1 automaker in terms of U.S. sales reported earnings of $1.3 billion in the quarter after the payment of dividends on preferred shares held by the U.S. Treasury. That was a stark turnaround from the $12.9 billion it lost in the year-earlier period when the company went into bankruptcy.
It was also an improvement from the $865 million it made on a similar basis in the first quarter.
Revenue reached $33.2 billion, up 5 percent from the first quarter and 44 percent from a year ago.
Achieving two straight quarters of profits was seen as a necessity before GM could return to the market to start selling shares. The company is expected to file to start selling those shares within days.
The sale of shares will be a key event in the company’s efforts to repay most of the $50 billion in federal assistance it received last year to continue operations before and during its bankruptcy reorganization. The U.S. Treasury Department has already been repaid a $7 billion loan by the automaker, as well as received $405 million in preferred stock dividends so far this year.
But most of the help was given in exchange for a 61 percent stake in the automaker.
I smell some funny business with the financials. No way is GM profitable this soon. Seems like GM is using the goodwill Ford earned as leverage, hoping they can fool everyone. I just don’t see it.
There is no way a company can post a $1.3 billion ‘profit’ when it received a $60 billion loan a year and half ago and that loan is still outstanding. They still owe $58.7 billion; that is a debt by any definition. Government Motors would have had to make $60 B to pay off the loan and another $1.3 B to show a profit for a total of $61.3 B. GM did not make $61.3 billion.
Agree with the commenters. Perhaps part of the ‘everyone wins’ world we now live in. Even business titans can’t talk about problems and losses. What is it with this generation of business leaders? Too much short term wins. Have to win the season, not just a quarter.
Profit and debt are mutually exclusive. It’s important news that GM has had two quarters in the black after restructuring. GM is getting a lot of press around the Volt (which is not out yet). They are poised for success, and repaying the debt.
Is this another case of Omama funding the unions with Federal money freeing GM to say they no longer have the retirement obligations?
I’m really glad none of the commenters above do my taxes. A company can make a profit and still have debt! Like the people with mortgages that say “I don’t own my house, the bank does.” Fools.