General Motors posts stronger than expected results – but it’s still not value for taxpayers
General Motors (GM) has joined a host of other US firms in posting better than expected results today amid strong demand from the US and cost-cutting in Europe, but the bailed out company is far from in the clear.
Net income in the second quarter of 2013 fell to $1.2bn, or 75 cents per share, down from $1.5bn/90 cents per share the year before. Excluding one-time items, earnings per share stood at 84 cents – nine cents above analyst expectations. Net revenue was up $1.5bn to $39.1bn.
| Adjusted earnings before interest and tax ($bn) | ||
| Q2 2013 | Q22012 | |
| GM North America | 2.0 | 1.9 |
| GM Europe | (0.1) | (0.4) |
| GM International Operations | 0.2 | 0.6 |
| GM South America | 0.1 | 0.0 |
| GM pre-tax earnings | 0.3 | 0.2 |
Commenting on the results, chief executive and chairman Dan Akerson said:
We continue to perform well in the world's two most important markets, the U.S. and China. We also made further progress in our European business and saw the steady performance of our global brands Chevrolet and Cadillac. For the rest of the year, we'll focus on winning customers with high-quality vehicles at a compelling value.
US markets are yet to open, but shares in GM were selling at $37.14 at the close yesterday. The US government watchdog has said that GM shares would have to sell at $95.51 per share for taxpayers to break even on bailing out the company in 2009.
The government hopes to exit its stake in GM by April next year. As of 6 June 2013, it still owned 189m shares or around 14 per cent of the company. Taxpayers are still short $18.1bn on the $49.5bn bailout.