Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

General Motors: First profit since 2004

By Chris Isidore, senior writer


NEW YORK (CNNMoney) -- General Motors on Thursday reported its first annual profit since 2004, capping an impressive turnaround by the once-troubled automaker.

The profit stemmed from a rebound in U.S. sales, strong growth in China -- now GM's largest market -- and a much lower cost structure after a 2009 trip through bankruptcy.

GM's bankruptcy, financed by the U.S. and Canadian governments, allowed the company to shed debt, excess factories, four of its weaker brands and many other costs.

The nation's largest automaker, GM earned $4.7 billion for the year. That ends a string of five years of losses during which the cumulative red ink topped $100 billion. The profit was the biggest at the company since 1999.

In the fourth quarter, the company earned $510 million, or 31 cents a share, compared to a loss of $3.5 billion a year earlier. But excluding a charge related to the purchase of preferred shares, the company earned 52 cents a share in the quarter, which is better than forecasts of a 46 cent a share profit from analysts surveyed by Thomson Reuters.

The profit is good news for the nearly 50,000 hourly workers at GM's U.S. factories who will get profit-sharing bonuses averaging $4,300, the largest in the company's history and a bit better than had been promised to them in a letter last week.

Workers at rival Ford Motor (F, Fortune 500) received bonus checks of about $5,000, and Chrysler Group expects to pay yet undisclosed performance bonuses to its workers, despite continued losses there.

Shares of GM (GM) gained slightly in pre-market trading following the report, but were down 3% in morning trading on higher oil prices. Shares had already tumbled 5% in the last two days on the spike in oil prices sparked by unrest in Libya.

Shares are only slightly higher than its initial public offering last November. The IPO, the most lucrative in U.S. history, returned $13.5 billion to U.S. taxpayers.

Still, shares will need to climb more than 60% more for taxpayers to recoup the full cost of the bailout on the remaining 500 million shares of the company held by Treasury. To top of page

Index Last Change % Change
Dow 17,745.98 -5.41 -0.03%
Nasdaq 5,128.79 17.05 0.33%
S&P 500 2,108.63 0.06 0.00%
Treasuries 2.27 -0.01 -0.48%
Data as of 7:22am ET
Company Price Change % Change
Facebook Inc 95.21 -1.78 -1.84%
Bank of America Corp... 18.13 -0.03 -0.17%
Microsoft Corp 46.88 0.59 1.27%
Whole Foods Market I... 36.08 -4.74 -11.61%
Ford Motor Co 15.10 -0.11 -0.72%
Data as of Jul 30
Sponsors

Sections

Loosening state restrictions have given gun silencer sales a boost. Silencers are now legal in 41 states, compared to 37 four years ago. Also some gun makers are making it easy to attach them. More

Beijing has just won the 2022 Winter Olympics but the competition was weak after many rivals dropped out due to concerns about the costs and lack of economic benefits. More

With iOS 9, Apple's latest mobile operating system that will launch in the fall, the iPhone is officially "all growns up." More

Fast-food chains that operate in more than 30 locations nationwide are the sole target of a new rule in New York to hike their minimum wage to $15. But consumers and small business owners, as well as some employees, may be the ones to pay the price. More

You can't blame it on the economy anymore. More Millennials now have jobs, but are still living at home. More