The “New General Motors” is still on a roll, having posted $3.2 billion in net income for the first 2011 quarter despite a couple negative numbers reported on its balance sheets, and said it expects to continue to increase profits on average through the rest of the calendar year.
This quarterly profit represented GM’s largest net income since at least 1990, according to Bloomberg.
Increased spending on sales incentives, engineering costs and marketing did cut into overall revenues that nonetheless increased by 15 percent to $36.2 billion.
A Chevrolet Volt passes a gas station by in Boca Raton, Fla. last month.
As the company increases its U.S. and international sales, it said it expects “no material impact” as a result of the Japan crisis that is adversely affecting several Japanese automakers both in the U.S. and in other markets.
GM’s 25-percent increase in sales was supported heavily by its most economical cars, as we reported yesterday. These economical sales are anticipated to continue, as the company said it is working on the assumption that higher oil prices are here to stay.
Increased sales also came at a price – an average of $3,566 spent per vehicle on sales incentives – which Autodata said was the highest paid among the eight largest automakers.
In all, North American sales rose $2.82 billion, but the company’s profit was cut by $700 million due to higher operating expenses.
According to Bloomberg, analysts and investors were not thrilled by the news.
“The market thought that they would beat the consensus by more than 5 percent,” said Adam Jonas, a New York-based analyst with Morgan Stanley to Bloomberg. “Nobody owns GM to meet numbers. They own GM to beat numbers by a significant amount.”
GM stock reportedly fell $1.02, or 3.1 percent, to $32.02 at 4 p.m. in New York Stock Exchange composite trading. This was the biggest decline since Feb. 24. The shares have slid 13 percent this year.
——————————————————————————————————————————
In addition to a few key charts that display some of the data in different ways, following are paraphrases, excerpts and whole sentences from GM’s April 5 press release. The company portrayed the situation in a factual, but overall positive tone.
Those of you who want to see a 38-page PDF of detailed charts, click here. For GM’s “Highlights,” click here.
For the first quarter of 2011, General Motors’ $3.2 billion net profit and revenues of $36.2 billion represented a $4.7 billion increase compared to the first quarter of 2010.
“We are on plan,” said Dan Akerson, chairman and CEO. “GM has delivered five consecutive profitable quarters, thanks to strong customer demand for our new fuel-efficient vehicles and a competitive cost structure that allows us to leverage our strong brands around the world and focus on driving profitable automotive growth.”
Net income attributable to common stockholders included gains of $1.6 billion and $0.3 billion respectively related to the sales of GM’s ownership interest in Delphi Automotive LLP and Ally Financial Inc. preferred stock.
Also included was a $0.4 billion goodwill impairment charge at GM Europe (GME) resulting from a change in accounting standards and charges totaling $0.1 billion at GM International Operations (GMIO) related to revised tax regulations affecting the company’s India joint venture.
Combined, these special items increased the $3.2 billion net income attributable to common stockholders by $1.5 billion or $0.82 per fully diluted share toward a total $1.77 billion per fully diluted share.
GM North America (GMNA) reported Earnings Before Interest and Taxes (EBIT) of $2.9 billion compared with $1.2 billion in the first quarter of 2010. On an EBIT-adjusted basis, GMNA increased its earnings by $0.1 billion to $1.3 billion compared with the first quarter of 2010.
The company expects GMNA’s quarterly EBIT-adjusted results to improve on average for the remainder of the year compared with the first quarter as better pricing and improved fixed cost should more than offset commodity cost increases and unfavorable mix.
General Motors Europe (GME) reported EBIT of $(0.4) billion. GME’s results improved by $0.6 billion on an EBIT-adjusted basis compared with the first quarter of 2010. The company said it achieved “a significant milestone by delivering breakeven results on that basis.” Based on current plans, the company said GME is targeting to achieve breakeven results on an EBIT-adjusted basis before restructuring for the entire year.
General Motors International Operations (GMIO) reported EBIT of $0.5 billion compared with $0.9 billion in the first quarter of 2010. On an EBIT-adjusted basis, GMIO earned $0.6 billion in the first quarter, a decline of $0.3 billion compared with the first quarter of 2010.
GM South America (GMSA) reported EBIT of $0.1 billion, down $0.2 billion from the first quarter of 2010. There were no adjustments in either period.
For the quarter, automotive cash flow from operating activities was $(0.6) billion and automotive free cash flow was $(1.9) billion. Both figures include the $2.5 billion cash impact of GM’s decision, announced in October 2010, to end a wholesale advance agreement with Ally Financial.
The company said it ended the quarter with very strong total liquidity of $36.5 billion. Automotive cash and marketable securities, including Canadian Health Care Trust restricted cash, was $30.6 billion compared with $27.6 billion at the end of the fourth quarter of 2010.
“GM has great potential to deliver profitable growth around the world as the recovery continues,” said Dan Ammann, senior vice president and CFO. “While we’re encouraged, we keenly recognize we have more opportunities to leverage our scale, improve spending and investment efficiencies, and optimize our strong balance sheet.”
Source: Bloomberg, GM.
UPDATE: (1:45 p.m. E.S.T.)
Chevrolet sold 493 Volts in April, representing a decline from the 608 sold in March. Some may report this news as a perceived increase from Nissan over the Volt which sold more LEAFs.
Nissan’s April LEAF sales jumped to 573 units, compared to 298 in March.
As we reported four weeks ago to the day (April 6), this is of no concern in any sense of a race. In an interview with GM Spokesman Rob Peterson, this was predicted:
Excerpt:
Also, going forward through 2011, don’t expect to see 12 months neatly divided into the number of units projected, he added, or even a consistent progression. Peterson already predicted April’s sales numbers may look lower.
“There are months in which we have more production not going to retail and April happens to be one of those months,” Peterson said. “We will be billing out the remaining demonstrator vehicles for the dealers. And so we’ll be earmarking a large portion of our production to hit dealer demonstrators rather than going to retail. So you might see a retail sales dip in the month of April.”
So you read it here first [written April 6]. The Volt already was the brunt of several April Fool’s jokes. If April’s sales are low, don’t let an after-the-fact April fools lark concern you.
+10
May 6th, 2011 (6:11 am)“The “New General Motors” is still on a roll, having posted $3.2 billion in net income for the first 2011 quarter despite a couple negative numbers reported on its balance sheets, and said it expects to continue to increase profits on average through the rest of the calendar year.
“This quarterly profit represented GM’s largest net income since at least 1990, according to Bloomberg.”
VERY IMPRESSIVE, ESPECIALLY SINCE THE COMPANY HAS FAR FEWER DIVISIONS THAN IN ’90!
-1
May 6th, 2011 (7:01 am)Half of the 3.2 billion is from a one time asset sale of Delphi…
Sales in China are actually down…
The stock price at ~ $ 32 is still a couple bucks below the IPO …
Let’s just say GM looks “healthy” and not get too carried away.
Statik? What say you?
+1
May 6th, 2011 (7:36 am)All good news.
But they still don’t have the best warranty in the car world. Why?
They need to brag about how good their products are and stand behind them.
Not everyone is convinced they should buy GM yet.
I’ve changed my mind, but I’m not everyone.
May 6th, 2011 (8:10 am)Hey Steve, was that your Volt in Boca?
+1
May 6th, 2011 (9:18 am)Be cautious. Corporate accounting is done on a yearly basis. The quarterly reports are suggestive and provide information, but as they are incomplete and not yet audited, and as it is easy to move some items from one quarter into another based on management judgment, one always has to be cautious about making too much out of one quarter’s information. Auditors really provide a valuable function in getting things explained right and forcing information out into the open. As strange as it seems, the year does not always turn out to be just four quarters added up.
May 6th, 2011 (9:48 am)The big issue is the incentives. GM’s price cutting is a threat to the entire industry, and it has become a big problem since Akerson firmly took the helm. The bankruptcy supposedly removed the need for discounting, so the natural question is why has it come back so strongly. Ford and Nissan offer roughly $2000/vehicle. GM offers $3000. What is so wrong with GM’s product or product mix that it has to discount so much more heavily than Ford?
+3
May 6th, 2011 (9:58 am)Earnings Before Interest and Taxes? I want GM to publish the earnings AFTER interest and taxes!
I don’t remember any “sales incentives” given to purchase a Volt. Must be the quality and demand that drives the sale of Volts. Yet each GM vehicle purchaser spent an average of $3,566 to pay for the incentive program company wide. This is definitely an area that GM can examine to help lower the cost of a Volt.
+2
May 6th, 2011 (10:19 am)Whew, more information than I can digest. Thanks, Jeff.
+13
May 6th, 2011 (10:39 am)OT:
The owner of our local Chevy dealership just sent me an e-mail to let me know that they will have their demo Volt in August, and that they will have an allotment of seven units for the third and fourth quarters of this year. He also said I will be contacted very soon to discuss the car I want to order.
A good news day in Youngstown, Ohio!!!!!!
+3
May 6th, 2011 (10:53 am)Jim I,
Congrats Jim. You’ve been waiting a while.
+1
May 6th, 2011 (11:04 am)Not to be flippant (ok, maybe a little), but what’s the Volt news in this post?
Do any of those numbers affect production of the Volt or the future of the Volt program?
Cause I don’t care about GM besides for the fact that they are producing and selling the Volt. Just me?
+5
May 6th, 2011 (11:11 am)The more I read press releases and reports from car companies the less I know, lol. I will say this: 5 quarters of profit at GM = 20.0 billion in cash, down from 40 post-bankruptcy.
I know paybacks, R&D, etc., etc. add up, but with foreign markets showing some weakness, GM is counting on the climate here at home quite a bit (historical irony) . A lot of incentives out there to keep that top line revenue chugging along, and not much is being stored away for reserves.
I think they are trying to dupicate the Ford model somewhat here, which is fine/ambitious…and looks to be working/should end up paying big dividends. GM is certainly positioning itself and taking the necessary risks to be the major player again, like the ‘old days’
However, if we have a return to the trend before quantitative easing came in, (that essentially artificially produced this current ecomonic environment climate that GM is growing/prospering in), GM could be in a world of hurt. It is a risky line they are taking…I’d love to know what Chris Liddell thinks about it.
+1
May 6th, 2011 (11:24 am)#7
Yeah, me neither, LOL. +1
+1
May 6th, 2011 (11:25 am)#9
Outstanding! +1
+4
May 6th, 2011 (11:29 am)#11
As GM goes, so goes the Volt. Weak GM = weak Volt R&D and progress. No GM = no Volt.
+2
May 6th, 2011 (11:31 am)#12
You put me in the mind of the great Mort Sahl. He always used to say:
“Reality, what a concept!”
That was just before he said:
“Now, are there any groups out there that we haven’t offended?”
Always nice to see your comments here old friend.
May 6th, 2011 (11:37 am)Hey Noel. You just know I couldn’t resist putting out at least a few 1s and 0s over the interwebs on this one, (=
/spreading the love one half empty cup at a time
May 6th, 2011 (11:46 am)Meh. That might impact the second or third gen Volts. But I’m still hoping to get one now.
May 6th, 2011 (11:53 am)DonC,
Usually when there is too much discounting, the profit margin is low. But, GM is showing a huge profit! What is wrong with that?
Maybe they should lower the price of their vehicles, but I don’t think that’s a good idea.
+5
May 6th, 2011 (11:54 am)LOL.. Wallstreet. “Huge profits announced!”… stock plummets becuase they were supposed to do better than huge profits. “Huge losses announced!” … stock soars because they were supposed to do worse than huge losses.
So…. anything new about Eestor?
May 6th, 2011 (11:58 am)Mark Z,
GM can not make enough Volts at this time. It would be foolish to lower the price of the Volt. As long as there is a big demand, GM should not lower the price.
May 6th, 2011 (12:56 pm)#20
LOL indeed! +1
+4
May 6th, 2011 (1:02 pm)Here in SoCal, we “wish” gasoline would drop back DOWN to just $3.89 per gallon. Sheesh!
+6
May 6th, 2011 (1:06 pm)There is a big psychological difference between $41,000 MSRP and $39,000.
I would like to see the base price drop just $2,000
It would make all the difference in the world.
May 6th, 2011 (1:11 pm)statik: spreading the love one half empty cup at a time
Statik, I’m going to be in Vegas 07/10 through 07/13. You planning on being at The Rio for WSOP?
July 7 – July 19 No-limit hold ‘em main event
=D-Volt
+9
May 6th, 2011 (1:19 pm)OT, but I had a really fun Volt experience last night. We were sitting in a restaurant in Long Beach, CA, and I couldn’t help hearing the owner chatting with some other customers about Prii and electric cars. I volunteered that I had a Volt sitting outside. He came out with me to see the car, along with the other 2 customers.
It turned out that they were a Channel 7 News film crew, and they interviewed me right on the spot for a feature about the effects of $4/gal gas. They asked me what I liked about the Volt and I answered with the usual litany about getting off imported oil, less air pollution, and trying to help to advance technology. I also said that I had driven 3600 miles and used 18 gallons of gas, which really got their attention.
Then I mentioned the side benefit of not having to stop at gas stations and get involved in the lines and the pushing and shoving that are going on at the lower priced stations around LA these days. They really got interested in that idea and asked me to comment about it on camera. I said that one of the great unexpected pleasures of the Volt is going literally weeks between stopping for gas, and driving by gas stations and seeing all of the poor souls liked up at the pumps.
I dunno if it even made it on the air, but it sure was fun, and says something about the level of interest out there around the Volt.
+1
May 6th, 2011 (1:20 pm)#23
No s__t, LOL! +1
+1
May 6th, 2011 (1:21 pm)#24
$39,995, LOL. +1
+1
May 6th, 2011 (2:21 pm)Nice!
NoPlugNoSale
+2
May 6th, 2011 (3:05 pm)Gas was $4.29 all week where I live in Michigan. I think the standard of living & average incomes are much less here than most of the rest of the country. So its not really the price of the gas we should look at, but more precisely the relative price of the gas. I think relatively, we have some of the most expensive gas in the country. My electricity is dirt cheap. All that being said, I still don’t mind higher gas prices. Its changing people’s driving habits already, causing the US to conserve (just like 2008). And also causing more fuel efficient cars to sell (just like 2008).
OK, now hit me w/the world will end if gas hits $5/gal and the 3rd Great Depression will be upon us.
+1
May 6th, 2011 (3:18 pm)#30
I believe that it is over $8 in the UK right now and they seem to be surviving. +1 They also have an AGGRESSIVE government electric car incentive program.
+1
May 6th, 2011 (4:15 pm)In the event anyone missed it, this was posted at the bottom of today’s story –
UPDATE: (1:45 p.m. E.S.T.)
Chevrolet sold 493 Volts in April, representing a decline from the 608 sold in March. Some may report this news as a perceived increase from Nissan over the Volt which sold more LEAFs.
Nissan’s April LEAF sales jumped to 573 units, compared to 298 in March.
As we reported four weeks ago to the day (April 6), this is of no concern in any sense of a race. In an interview with GM Spokesman Rob Peterson, this was predicted:
Excerpt:
Also, going forward through 2011, don’t expect to see 12 months neatly divided into the number of units projected, he added, or even a consistent progression. Peterson already predicted April’s sales numbers may look lower.
“There are months in which we have more production not going to retail and April happens to be one of those months,” Peterson said. “We will be billing out the remaining demonstrator vehicles for the dealers. And so we’ll be earmarking a large portion of our production to hit dealer demonstrators rather than going to retail. So you might see a retail sales dip in the month of April.”
So you read it here first [written April 6]. The Volt already was the brunt of several April Fool’s jokes. If April’s sales are low, don’t let an after-the-fact April fools lark concern you.
May 6th, 2011 (4:31 pm)========================
Statik:
If your cup is half empty, or it is half full, all that tells me is that your cup is too big!!!!
May 6th, 2011 (4:36 pm)================================
Our buddy Noel is now a big time TV star!!!!
So how long before we have to pay for an autograph?????????
+3
May 6th, 2011 (4:39 pm)=============================
For the Volt, since March, 2007, when I stumbled upon this web site.
But actually, I have been waiting for this car since about 1980, when gasoline prices first jumped to over $1.00 per gallon!
+2
May 6th, 2011 (5:39 pm)Advanced congrats. You’ll really like the car.
+2
May 6th, 2011 (7:30 pm)OT…
Sacramento City Police will be laying off ~80 people. It’s been the news so it’s not new. Sources say they need to cut spending.
My sources say it’s operating costs and the brunt of it is fuel costs. They are actually looking to outfit some of their cruisers with a small Lithium packs to power the AC in the car because when they sit idle, officers keep the cars running for the AC while they fill out their paperwork. My inside informant, call him Sgt. Shultz, told me fuel costs are to blame.
Now for my employer. A memo came out from our fleet services that we need to “Fill” an 18Mill deficit. The deficit is to make sure *THEY* have the funding to keep the fleet (cars, trucks, SUV, Heavy equipment) running. There is no option to cut back on the fleet, the drivers etc. So the decision was made that all other departments will be cutting and by cutting they will be issuing the pink slips to folks. A total of 44 and 11 of them in my department. This news will hit the media prolly in June when the pinks get issued. My head might be in the 11 to roll.
What were the “Pros” on high gas prices again?
/I call this the “withdrawal symptoms” of getting off an addiction….
//BrokAzz CA!…. lol
May 6th, 2011 (8:57 pm)Checked the A123 Systems page today. One of their products looks very much like the LG Chem/GM T battery. This is probably for Fisker applications. Wonder what the 0-60 and range are on the A123?
NPNS
+1
May 6th, 2011 (10:16 pm)Saw my first Volt yesterday…..pulling out of Reagan Hospital on the UCLA campus. I told the driver that I loved her car….she replied she was getting 3,500 mpg….I assume she’s driven that many miles and only used 1 gallon so far. If she is a poster on this site I’d love to hear the rest of the story.
To say the least…I was green wtih envy (Volt was silver)
+1
May 7th, 2011 (1:25 am)Very sorry to hear this. The good thing is that gas prices should be going down so perhaps they’ll revise their estimates.
+1
May 7th, 2011 (1:27 am)I’ve seen five. Two white, two Viridian Joule, and one silver. I saw the silver one today (maybe it was grey?) as I sat at a red light. He turned in front of me and we both had one of those — hey it’s a Volt — moments.
+5
May 7th, 2011 (7:46 am)Slightly OT but fascinating: In his new book “Car Guys vs Bean Counters” due out on June 9, former GM vice chairman Bob Lutz firmly puts the Volt birthers and their tinfoil-hat-wearing fellow travelers in their place. Lutz says, “Volt paved the way; Volt was the first with the extended-range EV concept; Volt demonstrated the will and the technological capability of General Motors. And to all the doubters, opponents, critics and skeptics… [like Rush Limbaugh and Glenn Beck], I say: ‘Eat your hearts out. Volt is the future’.” *
And in related news: BMW engineering in Munich has not only bought a Volt, but has also hired the former lead engineer of the Volt team, Frank Weber, who will report directly to BMW’s R&D chief Klaus Draeger. It’s been a very long time since one of Germany’s blue-chip automakers took American automotive engineering that seriously.*
/*Ref: http://blogs.motortrend.com/bob-lutz-glenn-beck-eat-heart-volt-future-14747.html
+2
May 7th, 2011 (8:41 am)When BMW enthusiasts start buying the electric models. Similar manufacturers will be feeling a bit dated. What did the head of Audi call folks who buy the Volt?
I have driven my Volt between 33 and 92 miles per day this week. All on battery power except for .03 gallons used at the end of a 43 mile drive. I stopped at the gas station once. This was to give my wife money to fill the truck. Love this car and the included high tech features. Am leaning on the rear camera view and parking sensors more and more. We have used the heated front seats about 10 times now. Wife loves them.
=D-Volt
+2
May 7th, 2011 (10:16 am)At the top of the thread is a sign for the price of gas.
CJS has the precise point here regarding peoples jobs, but bringing that important point further, we would hope that the affordability of electric motoring may indeed be brought about well before the chronic cost escalation of gas has most of us too drained financially to afford a Volt.
That’s the race that means the most at this point. Gasoline excessive overhead will merge into people’s other lines of credit eventually, (possibly making the financing approval more difficult or costly), so, this is the point and factor that could increasingly be prevalent if the MSRP cost reduction is not also allowed to be known soon.
May 7th, 2011 (12:27 pm)#34
Quite awhile is my guess, LOL. +1
Andy Warhol said that everybody gets 15 minutes of fame. I’m thinking that the real number is more like 15 seconds, LMAO.
As the great U. Utah Phillips used to say, “He’s a rumor in his own time”.
+1
May 7th, 2011 (12:53 pm)#42
Well maybe once in awhile when the Corvettes beat the Porches and BMWs at the race track, LOL. Point taken though. +1
+1
May 7th, 2011 (2:08 pm)Awesome! The Post of the Day, and one of your best ever.
+1
May 7th, 2011 (2:43 pm)#47
Many thanks for your kind words. +1 It really was kind of fun,and it sure impressed my date, LOL!
-14
May 7th, 2011 (8:23 pm)(click to show comment)
+2
May 7th, 2011 (8:46 pm)Hey, thats a picture of me driving my white VOLT past a gas station sign in Boca Raton a few weeks ago when GM sent a photographer to take a load of photos for press release.
+1
May 7th, 2011 (10:02 pm)But then all we’d have is Gas Hog Fusion hybrids and silly Focus electrics.
+1
May 7th, 2011 (10:24 pm)That’s one nice looking 150+ mpg car (Volt) there Steve W.
+9
May 8th, 2011 (7:11 am)It has been three weeks since I bought any gas….and that was 2 gallons. I love my new Volt. The wife and I have gone to taking Sunday drives again. You remember them? Nowhere to go but just get in the Volt and drive. 40 miles just for the sheer pleasure of driving. Now that is fuel economy.
Take Care, TED
+1
May 8th, 2011 (7:41 am)I say… bring back PONTIAC!
GM needs the performance division.
+2
May 8th, 2011 (7:51 am)I had a interesting experience while test driving the Volt here in PA… as we pulled out of the parking lot to our building a Prius was coming at us… they recognized the Volt and began pointing and yelling and beeped at us…. we waved and beeped back…. I guess we should have stopped and chatted but I was too intent on taking the test drive…. also .. we did find that expensive cars don’t like when you pull away from them at a stop sign… the response is to pour on the GAS and try to pass you.
May 8th, 2011 (7:57 am)So I see this site is advertising for Toyoda now…… the add has three signs in on the wall .. Jeff you should put a Volt with the dozen or so major awards on a wall plus the cost of the Volt in the US and the cost of the Volt in JAPAN Korea and Germany.
+1
May 8th, 2011 (8:02 am)Last but not least…. think about what the profits for GM and FORD would be if we could sell cars in Korea.. Germany and Japan without the tariffs they put on our vehicles like we let them sell cars in the US!
Just think about GM building a plant in Japan to build Volts and then running a ad in Japan stating the our factory is good for the Japanese economy.
May 8th, 2011 (10:01 am)Eco_Turbo,
Don’t feed the trolls!
May 8th, 2011 (10:07 am)Dan Petit,
“… if the MSRP cost reduction is not also allowed to be known soon.”
We will find this out soon enough, in the Fall introduction of 2012 Volts. It is always suicide to pre-announce price reductions as customers will stop buying your present product and wait for the new version.
+3
May 8th, 2011 (12:11 pm)Volt owners are saving so much in gas, that a graduated price lowering plan that is consistent with those savings ought to be the best way to do it. How about a three or four thousand dollar a year lowering plan?
I was repairing a scanner in one of the shops I taught last year. When I finished and looked up above the owners desk, I noticed that there was a sign that said:
“If we fail to plan, we plan to fail”.
I wish that management would be more objective in understanding *our viewpoints and perspectives*, that we as customers need to longer-term-plan for such a larger cost expenditure, then they will sell more Volts.
*
*
We need to know these things soon.
+4
May 8th, 2011 (7:59 pm)Just under 4 months of operation now with Volt #555.
About 400 mpg with the first oil change due in 2012.
=D-Volt
May 9th, 2011 (4:40 am)I feel like doing the Limbo, who’s with me! YAY!
May 9th, 2011 (4:19 pm)If you are still out there somewhere, sorry for the belated reply. Now that I have zero internet writing responsibilities I am given to taken long weekends off, heeh.
Not sure if I will be able to make the Main Event this year…my wife doesn’t play poker and she has a family event that is unfortunately planned for the same time. I may still get away for it…but Johnny Chan may need a new whipping boy this year, lol. I am hopefully going to go down over the long weekend in June for a couple of the early events.
I really wish it wasn’t held in the summer…I know why they do it, but it makes it a lot harder for me to attend.