General Motors Co. reported first-quarter net income of $865 million, helped by higher production and smaller discounts, as the maker of the GMC Terrain and the Chevrolet Equinox works toward an initial public offering.
Operating profit was $1.2 billion in the first three months of the year, and the company generated $1 billion in free cash flow, Detroit-based GM said today in a statement. Revenue rose 40 percent from the same period a year earlier to $31.5 billion.
Chief Executive Officer Ed Whitacre has said reporting a profit is a necessary milestone as the biggest U.S. automaker seeks freedom from government ownership. GM, which emerged from bankruptcy protection in July, is considering a return to the auto-lending business to make its offering more appealing to investors, people familiar with the plans said last week.
"The unfortunate process of bankruptcy is yielding positive results," Rebecca Lindland, an analyst at IHS Global Insight in Lexington, Massachusetts, said today in an interview. "It certainly keeps them on track for an IPO."
GM North America and the company's international operations each had profits before interest and taxes of $1.2 billion, while the automaker had a $500 million loss in Europe.
GM's 8.375 percent bonds due in July 2033 rose 2.125 cents to 37 cents on the dollar at 10:24 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The debt was issued by predecessor General Motors Corp. and will convert into equity in the new GM.
Sustained Profitability
GM Chief Financial Officer Chris Liddell told reporters today that GM was making progress toward sustained profitability for the rest of the year, without providing specific numbers.
The most-recent quarter's results were helped by traditionally strong production at the start of the year, Liddell said, adding that output may weaken in the coming quarters.
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