GM Expects A Profitable 2010

General Motors is expecting to finish with a profit for the first time in six years after having earned $2 billion in the third quarter of 2010. This new development will likely help boost the automaker's stock, which it will be selling next week on the New York Stock Exchange.

GM's third-quarter profits went up 50.4% from the second quarter, which ended with an income of $1.33 billion. After interest and taxes, the company's total earnings over the year total $4.2 billion.

The three consecutive profitable quarters and steady cash flow indicate significant progress in the company's recovery, chief financial officer and vice-chair Chris Liddell said in a statement this week. GM emerged from Chapter 11 bankruptcy protection about a year ago.

GM's profits exceed those of rival company Ford, whose third-quarter profits total $1.7 billion. Chrysler, another major auto company, lost $84 million.

Company officials expect GM's turnaround to help it reach its goal of raising some $13 billion in its initial public offering, slated for November 18. They are aiming for about $26 to $29 per share to bring the Treasury Department's holdings down to under 50%.

The company had announced last month that to boost its share value, it would pay off $11 billion worth of debt and pensions, including $ 4 billion in cash, $2.8 million into a retiree medical trust, and $2 billion in common stock as part of pension plans.

GM filed for bankruptcy protection last year and had to drastically restructure, dropping several big brands and cutting its dealership network by about 40%. It also received a government bailout in exchange for giving up majority ownership to the U.S. Treasury.

 

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