NEW YORK (CNNMoney) -- General Motors reported its best quarter since 1999 Wednesday, setting the stage the automaker to begin selling shares to the public once again.
GM reported it earned $1.96 billion in the quarter, compared to a loss a year earlier when it was still in the process of emerging from bankruptcy. It's the third straight quarter that the automaker has reported a profit.
The last time GM reported a profit this large was the first quarter of 1999, when it earned $2.05 billion. But by 2005 the company's declining market share and uncompetitive cost structure had plunged it into a series of annual losses that culminated in its 2009 federal bailout and bankruptcy filing.
What emerged from that was a new company without much of the debt, labor obligations and excess capacity of the old GM. Wednesday's earnings report put the company in position to post its first annual profit since 2004.
The results were in the middle of the earnings range the company signaled last week, when it said it would earn between $1.9 billion and $2.1 billion. The details released Wednesday showed most of the profit coming from its North American operations, where it made an operating profit of $2.1 billion.
The international unit, which includes China, earned $646 million, but that was balanced out by a loss of $559 million in Europe. The company now sells more cars in China than it does in the United States.
The company said it expects to be profitable again in the fourth quarter, although it cautioned income would be a "significantly lower run rate" than it earned in the first three quarters of the year. It cited a different production mix in the fourth quarter.
Also cited as reasons the fourth quarter will be weaker were new vehicle launch costs, particularly for the Chevrolet Cruze and Volt, and higher engineering expenses for future products.
The earnings report came about a week before GM will start selling shares to the public for the first time since it emerged from bankruptcy in July 2009.
The company expects to raise about $13 billion selling shares, putting it on course to be the third-largest initial public offering in U.S. history. That stock price target would value the company at about $52 billion, comparable to rival Ford Motor (F, Fortune 500).
Most of those stock sale proceeds will go to its existing shareholders, not the company, with the U.S. Treasury Department receiving a bit more than half of the shares. Treasury, which provided a $50 billion bailout to keep the company alive through its bankruptcy process, holds 61% of its common shares today, although that will fall to just over 40% once the initial sale takes place.
Treasury intends to space out the sale of its remaining GM shares over upcoming years so as not to flood the market with shares and drive down the price. Whether taxpayers make a profit on GM's bailout will determine the price Treasury receives when it sells those additional shares, but it will take a nearly a doubling in share price from the initial price target in order for taxpayers to break even.
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