GM posts record $7.6B profit in 2011
Company loses $700 million in Europe last year
CBC News
Posted: Feb 16, 2012 8:57 AM ET
Last Updated: Feb 16, 2012 1:08 PM ET
A man walks past cars at a General Motors dealership in Toronto. General Motors posted a record profit of $7.6B in 2011. (Nathan Denette/The Canadian Press)
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General Motors posted its highest profit ever last year, earning $7.6 billion US in 2011, up 62 per cent from 2010.
It was General Motors' second full year after emerging from bankruptcy protection in 2009, and its first full year as a public company.
Revenue at the 103-year-old company rose 11 per cent to $105 billion. General Motors sold nine million cars worldwide, beating out Volkswagen and Toyota as the number one automaker in the world.
Last year marks the first year since 2004 that all three big Detroit automakers — General Motors, Ford and Chrysler — posted a full-year profit.
The majority of General Motors' earnings came from its North American operations, which reported a $7.2 billion pre-tax profit.
GM's other international operations elsewhere in the world continued to perform well, earning $1.9 billion in 2011. General Motors is particularly dominant in China, where it sold 1.3 million vehicles in 2011.
Feeling the pain in Europe
Despite strength in North America and China, Europe's debt crisis is continuing to drag on GM's bottom line. The company's troubled European unit lost $747 million in 2011, an improvement over a $1.3 billion loss in 2010.
It's the 12th straight year GM has lost money in Europe, and it doesn't seem to be improving.
The losses in Europe are actually deepening for General Motors. In the last three months of the year, its European operations lost $547 million, nearly doubling the loss of $292 million from the previous three months.
The automaker sold 1.7 million cars in Europe in 2011, and saw its share of the market drop to 8.6 per cent from 8.8 per cent a year earlier.
Fourth quarter disappoints
GM's fourth-quarter profit was flat compared to the same period in 2010. GM earned $500 million, or 28 cents per share. Revenue rose 3 per cent to $38 billion. Before one-time items, GM earned 40 cents per share.
Analysts had expected earnings of 42 cents per share on revenue of $37.9 billion.
Despite the missed estimates, General Motors' stock rose by 5.6% in mid-day trading on the New York Stock Exchange to $26.32 per share.
Profit Sharing
General Motors also announced that 47,500 unionized workers in the U.S. will get $7,000 profit-sharing cheques.
Canadian workers will not get proft-sharing cheques due to a hard-line stance the Canadian Auto Workers union has taken against profit-sharing.
With files from The Associated PressShare Tools
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