General Motors has announced first quarter results ahead of analysts’ expectations with net income of US$3.2bn, or $1.77 per share, the post-Chapter 11 automaker’s fifth consecutive profitable quarter. Revenue increased $4.7bn to $36.2bn, compared with the first quarter of 2010. Earnings before interest and tax (EBIT) were $3.5bn. EBIT adjusted to exclude special items was $2.0bn compared with $1.7bn in the first quarter of 2010.
Analysts polled by Thomson Reuters I/B/E/S had expected GM to report an operating profit of US$1.72bn, or 91 cents a share, on sales of $35.6bn.
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“We are on plan,” Dan Akerson, GM chairman and CEO, said in a statement. “GM has delivered five consecutive profitable quarters, thanks to strong customer demand for our new fuel-efficient vehicles and a competitive cost structure that allows us to leverage our strong brands around the world and focus on driving profitable automotive growth.”
Net income included gains of $1.6bn and $0.3bn respectively related to the sales of the company’s stake in Delphi Automotive and Ally Financial. It also includes a $0.4bn goodwill impairment charge at GM Europe (GME) resulting from a change in accounting standards and charges totaling $0.1bn at GM International Operations (GMIO) related to revised tax regulations affecting the company’s India joint venture. Combined, these special items increased net income by $1.5bn or $0.82 per share.
GM North America (GMNA) reported EBIT of $2.9bn compared with $1.2bn in the first quarter of 2010. On an EBIT-adjusted basis, it increased profit by $0.1bn to $1.3bn compared with the first quarter of 2010. The company expects GMNA’s quarterly EBIT-adjusted results to improve on average for the remainder of the year compared with the first quarter as better pricing and improved fixed cost should more than offset commodity cost increases and unfavorable mix.
GM Europe reported negative EBIT of $(0.4)bn but results improved by $0.6bn on an EBIT-adjusted basis compared with the first quarter of 2010 and it achieved breakeven on that basis. GME is targeting breakeven results on an EBIT-adjusted basis before restructuring for the full year.
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By GlobalDataGM International Operations reported EBIT of $0.5bn compared with $0.9bn in the first quarter of 2010. On an EBIT-adjusted basis, GMIO earned $0.6bn in the first quarter, a decline of $0.3bn year on year.
GM South America (GMSA) reported EBIT of $0.1bn, down $0.2bn from the first quarter of 2010. There were no adjustments in either period.
“GM expects that full-year 2011 EBIT-adjusted results will show solid improvement over 2010 [and] continues to expect no material impact on full-year results from the Japan [earthquake] crisis,” it said in a statement.
“GM has great potential to deliver profitable growth around the world as the recovery continues,” said CFO Dan Ammann. “While we’re encouraged, we keenly recognise we have more opportunities to leverage our scale, improve spending and investment efficiencies, and optimise our strong balance sheet.”
