General Motors reported a Q3 net income of $2 billion — its third consecutive positive quarter, as it prepares to begin selling its stock on the New York Stock Exchange 11/18.
The company’s performance was up from the second quarter, when it reported $1.33 billion in net income, and is a reversal of its deep Q3 loss last year of $1.15 billion. The results put the automaker on track for its first profitable year since 2004. Revenue also climbed in Q3 to $34.1 billion, up from $33.2 billion in Q2 and an increase from $28 billion in Q3 2009.
The company’s strategy of trimming brands seems to be working. “We’ve arrived here because we continue to deliver on our major business objectives,” said CEO Daniel Akerson. “We’ve increased our global market share relative to the first quarter. On a year-to-date basis, we’ve sold more vehicles in the U.S. with four brands than we did last year with eight brands.”
Of course, Akerson also attributed the Q3 profit to the company’s success in reducing cost in North America, so it can continue making money when industry sales are low, as well as its strong sales position in emerging markets of China, India, Brazil and Russia.
However, GM Europe posted a pretax loss of $600 million, compared to a Q2 loss of $200 million. “We know we have much more work to do,” Akerson said. “We still need to fix Europe.”
With these latest results, GM continues its money-making streak, having exited bankruptcy last year, with year-to-date earnings for 2010 totaling $4.2 billion after taxes and interest.
They come at a crucial time for the automaker, as its executives travel to Canada, Europe and to major cities in the United States, trying to drum up interest among big institutional investors in next week’s initial stock sale, says The Detroit News story.
GM said last Wednesday it will sell 365 million shares priced between $26 and $29 a share. A final strike price for the offering will be announced 11/17, with trading beginning the next day.
RBR-TVBR observation: According to Nielsen numbers, for the first half of 2010, the automotive advertising category was up some 27% — driven largely by increased spending by General Motors, which was up 73% over the first half of 2009. Ford, also profitable now, grew its ad spending by 15% in the same period. Dealer Association spending made up a big portion of this as well. Yes, a lot of the success can be attributed to strategy, but some of it is certainly from increased ad spend.