GM results to show gain over first-qtr: sources

General Motors Co GM.UL is preparing to report second-quarter results that will show a substantial gain over the first quarter in a report it will use to bolster its bid to return to capital markets and pay back taxpayers, two people familiar with the matter said.

GM, now 61 percent-owned by the U.S. government, is counting on the momentum from its quarterly results to help it clinch a $5 billion bank credit facility as it prepares a stock offering expected to be the largest ever for the U.S. market.

GM has substantially completed work needed to register the IPO with the SEC but needs to complete negotiations with banks for its credit facility before that filing, the sources said.

As part of that process, GM has been reaching out to financial institutions and investors in an outreach spearheaded by Chief Financial Officer Chris Liddell and intended to give them confidence in the automaker's outlook, according to people with knowledge of those private discussions.

GM Chief Executive Ed Whitacre, appointed by the Obama administration to oversee the automaker's turnaround, said last week he expected the automaker's second-quarter result would be viewed positively by both potential investors and creditors.

"It will be good. It will be impressive," said Whitacre, who has also said his top priority is shedding the automaker's ties to the U.S. government and the label "Government Motors" used by critics of its bailout.

A GM spokeswoman said the automaker was not providing financial forecasts and would not comment. GM will report second-quarter results on Thursday.

GM could finalize its bank credit facility by the end of August, allowing it to press ahead with its stock offering by the end of the year, the sources said.

Meanwhile, GM's second-quarter results this week will show higher earnings than the first quarter's $865 million profit, its first quarterly profit since 2007, they said.

For 2011, GM is projecting that it could generate $16 billion in earnings before interest, taxes, depreciation and amortization, one of the sources said. JPMorgan debt analyst Eric Selle has forecast GM's 2010 EBITDA at $11.4 billion.

That measure of cash generation is important because it is one of the key measurements that bankers and investors will use to estimate how much the restructured automaker should be worth when it reemerges as a publicly traded company.

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