GM cruises toward IPO
By Tom Krisher |
November 5, 2010, Friday
|
Print Edition
Print Edition
GENERAL Motors Co took a huge step forward yesterday in ending its ownership by the government, filing paperwork that gave the price range and other details of a planned initial public offering.
The company also forecast that it earned as much as US$2.1 billion from July through September, a strong financial performance as the company prepares for a IPO on November 18.
The third-quarter earnings, which GM will report next week, bolster the firm's contention that it is leaner and more profitable since restructuring under a government-funded bankruptcy last year.
GM earned US$2.2 billion in the first half after it cut brands, lowered debt and offered popular new models of cars and crossovers.
But those six months of earnings could almost be matched in the third quarter alone, if GM's most optimistic prediction pans out.
GM on Wednesday forecast net income of between US$1.9 billion and US$2.1 billion during the period, and said revenue could reach US$34 billion. GM lost US$1.2 billion in the third quarter of last year, when it was just emerging from bankruptcy.
GM also predicted positive earnings before taxes in the fourth quarter, but said they will be lower than prior quarters due in part to the cost of launching the Chevrolet Cruze compact car and Volt rechargeable electric car.
"We will deliver a solid and profitable first year post-bankruptcy, and we are continuing to improve our balance sheet and most importantly, the quality of our vehicles," Chief Financial Officer Chris Liddell said in a statement.
The healthy financial outlook gives GM some positive talking points ahead of its IPO.
The company also forecast that it earned as much as US$2.1 billion from July through September, a strong financial performance as the company prepares for a IPO on November 18.
The third-quarter earnings, which GM will report next week, bolster the firm's contention that it is leaner and more profitable since restructuring under a government-funded bankruptcy last year.
GM earned US$2.2 billion in the first half after it cut brands, lowered debt and offered popular new models of cars and crossovers.
But those six months of earnings could almost be matched in the third quarter alone, if GM's most optimistic prediction pans out.
GM on Wednesday forecast net income of between US$1.9 billion and US$2.1 billion during the period, and said revenue could reach US$34 billion. GM lost US$1.2 billion in the third quarter of last year, when it was just emerging from bankruptcy.
GM also predicted positive earnings before taxes in the fourth quarter, but said they will be lower than prior quarters due in part to the cost of launching the Chevrolet Cruze compact car and Volt rechargeable electric car.
"We will deliver a solid and profitable first year post-bankruptcy, and we are continuing to improve our balance sheet and most importantly, the quality of our vehicles," Chief Financial Officer Chris Liddell said in a statement.
The healthy financial outlook gives GM some positive talking points ahead of its IPO.
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