Financial News Story of the Day – GM Posts Record Breaking Profits at $7.6 Billion
General Motors has just come back in a big way, posting a record profit of $7.6 billion in 2011. Although overseas losses have cut into the profits, GM has reclaimed the top spot as the number 1 auto manufacturer in the world from Toyota after natural disasters hurt its production numbers. This is a sharp turnaround from 2009, when the ailing automaker was controversially bailed out to the tune of $49.5 billion from taxpayers. The company is already showing good progress, although sales figures are projecting a lower profit amount for 2012. The government currently owns 500 million shares of the automaker and has recouped about $22 billion thus far. The remaining share prices would have to double for the government to break even on the bailout, which isn’t so far-fetched considering the company’s latest turnaround and strong product offering.
Excerpt: “Despite the big annual profit and optimistic outlook, GM still lost $747 million before taxes in Europe last year, and its losses are expected to continue until a restructuring plan takes hold.
Akerson said GM will have to cut its European factory capacity to match lower sales. South America lost money, too: $122 million for the year. GM’s fourth-quarter profit fell 8 percent, and its U.S. sales growth slowed in the quarter even as more Americans bought cars and trucks.” (source: Finance.Yahoo.com)
Daily Finance Summary – Dow Up Big
- The Dow Jones closed only 100 points below 13,000, an important psychological barrier
- GM reported a record-breaking $7.6 billion profit
- Gold and oil are expected to climb
- Yelp is preparing for their IPO worth a reported $100 million