GM Q1 Profits Triple

by Bertel Schmitt

Published: May 5th, 2011

GM solidly trounced analysts’ expectations and delivered $3.2 billion if Q1 2011 net income. The consensus of a Bloomberg panel was $1.74 billion. Compared with the first quarter of 2010, revenue increased $4.7 billion to $36.2 billion, says GM press release. GM’s first-quarter profit more than tripled to its highest in at least 21 years.

About half of the glad tidings were not earned in the showroom. Says the communiqué:

“Net income attributable to common stockholders includes gains of $1.6 billion and $0.3 billion respectively related to the sales of the company’s ownership interest in Delphi Automotive LLP and Ally Financial Inc. preferred stock. It also includes a $0.4 billion goodwill impairment charge at GM Europe (GME) resulting from a change in accounting standards and charges totaling $0.1 billion at GM International Operations (GMIO) related to revised tax regulations affecting the company’s India joint venture. Combined, these special items increased net income attributable to common stockholders by $1.5 billion or $0.82 per fully-diluted share.”

However, even excluding these items, profit was 95 cents a share, topping the 91-cent average estimate of 13 analysts surveyed by Bloomberg.

GM is not breaking out how much money it made in its largest market China. The release only says that “GMIO reported EBIT of $0.5 billion compared with $0.9 billion in the first quarter of 2010. On an EBIT-adjusted basis, GMIO earned $0.6 billion in the first quarter, a decline of $0.3 billion compared with the first quarter of 2010.” GMIO stands for “GM International Operations.”

#BertelSchmitt #GM #Q12011Results

Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

More by Bertel Schmitt

Comments

Join the conversation

10 of 34 comments

Jkross22 on May 05, 2011

Since GM is so successful, let's have them buy back some stock from the government. How much does the US Treasury hold? Last I heard, the plan was for Treasury to sell large pieces of stock this Summer, netting a loss for the taxpayers. GM fans, please hold your applause until the those of us who won't buy GM products see money returned to the government to be wasted on other programs. Still, congrats on the good news.

Like Reply
Bd2 on May 05, 2011

Good for GM! While Ford has been getting pretty much all the kudos lately, it's interesting to note that one of the areas that Ford is weakest (sales in the fast growing BRIC auto markets - esp. China) is where GM has done really well. And as for all the talk about how Ford didn't need bailout $$, they were fortuitous in being able to hock themselves to the hilt before the credit market froze; if they had delayed, they would have been in the exact same shape as GM and Chrysler. Also, w/o the bailouts, the suppliers supplying GM and Chrysler would have gone under and many of them also supply Ford which would have eventually sent Ford over the edge as well. And then there's Ford Credit ...so it's not so black and white.

Like Reply
- See 2 previous
- TexN on May 05, 2011
  
  Sorry, bd2, but I've got to call "bull" on your entire premise! There is a whole lot of "if, then" in your response. The fact is that Ford made decisions and took actions WITHOUT using bailout money and you want to hold it against them! And you KNOW for a fact that "the suppliers supplying GM and Chrysler would have gone under......". If I could predict the future, as you evidently can, I'd go all in on the next lottery. Please stick to facts and try not to spin scenarios to make it appear as though GM were dealt some bad luck and Ford just got lucky.
  
  Like
- Wsn on May 05, 2011
  
  "Also, w/o the bailouts, the suppliers supplying GM and Chrysler would have gone under and many of them also supply Ford which would have eventually sent Ford over the edge as well." No. Simply not true. If GM/Chrysler went under, there would be a flood of investment money going to Ford, helping it overcame the part shortage. And as the only American auto maker remaining, Ford would pay back that investment in no time once recovery starts (as of now).
  
  Like
- MikeAR on May 05, 2011
  
  If you are a bailout apologist, read this: http://www.nationalaffairs.com/publications/detail/the-auto-bailout-and-the-rule-of-law Read it with an open mind and get back to me if you learned something from it. And admit that those of us who are anti-bailout have many very valid arguements.
  
  Like
Mtymsi on May 05, 2011

Living in metro Detroit obviously I'm glad GM & Chrysler got bailed out. I still think the end result will prove the government made a financially wise decision to keep both companies in business. Don't forget what the state of the entire economy was at the time of the bailouts and what effect both companies going under would have had. I completely understand the opinions of those that remain opposed to the bailouts but I also vehemently disagree with that stance. The bailouts had an enormous positive effect on our local economy and I am a beneficiary of that.

Like Reply
RRocket on May 05, 2011

Oh...so the taxpayers aren't going to lose any money on this bailout then?? Let me know when (if?) that happens...

Like Reply
- See 2 previous
- Mtymsi on May 05, 2011
  
  I honestly don't think the taxpayers will lose any money on the GM & Chrysler bailouts. Considering how well both companies are doing in the short amount of time it has been since the bailouts IMO both will repay the government in full. Given the massive cost to the government if both had failed and the disastrous effect it would have had on the economy I firmly believe the government made the right decision. I certainly do not think this country would be better off today had both companies failed and I doubt even those opposed to the bailouts think it would. It is one thing to be philosophically opposed to the bailouts on principle and post such here. It is quite another to live in a region that is highly dependent on both companies' survival for its own economic survival. I will go so far as to state anyone that thinks this country would have been better off had both companies failed is guilty of delusional thinking at best.
  
  Like
- CJinSD on May 05, 2011
  
  @mtymsi "I honestly don’t think the taxpayers will lose any money on the GM & Chrysler bailouts." "I will go so far as to state anyone that thinks this country would have been better off had both companies failed is guilty of delusional thinking at best." So you're aware of the concept of delusional thinking. You've got my vote for the Irony World Championship.
  
  Like
- Mtymsi on May 06, 2011
  
  @mtymsi This is an argument that will never end, those opposed to the bailouts vs. those in favor. Time will tell if I am correct in my assertion that the government will be fully repaid. Even the most ardent anti-bailout proponent can't dismiss the current financial performance of either company. It is really as simple as this, are we better off with GM & Chrysler prospering or would we have been better off if they did not exist? If your response is we would be better off if they didn't exist please explain how the economy would now be stronger under those circumstances. I don't expect you to reply because quite simply there is no rational argument that could support that theory. All I can do is reiterate my strong approval of the bailouts as I have both witnessed and economically benefited from them. Remember your thoughts on the subject when the government is repaid in full. Also consider if both companies had failed what the effect would have been on suppliers. IMO what is truly incomprehensible is what the overall effect on the economy (the worst since the Great Depression) would have been had both companies been allowed to fail. From just a purely economic standpoint the bailouts were a necessary evil in the same vein the bank bailouts were. This country's economy couldn't withstand either the banks or two of the domestic automakers going belly up.
  
  Like