NEW YORK (AFP) – Leading US carmaker General Motors was back in the black after a massive government rescue, reporting Thursday full year net earnings of $4.7 billion for 2010 after deep losses in the previous year.
In its first annual report since emerging from bankruptcy reorganisation, GM said it had been profitable over four consecutive quarters, including $500 million net income in the fourth quarter ended December 31, even after net charges of $400 million related to repaying the federal government for its massive bailout.
The company said that it had officially returned to stable footing, with its audit committee ruling it was no longer hobbled by any "material weakness."
"Our focus for 2011 is to build on our progress and continue to generate momentum in the marketplace. We expect our first quarter will be a strong start," said chief financial officer Chris Liddell.
The company said it would pay out profit-sharing averaging $4,300 a person to 45,000 eligible GM employees, a recognition of the cuts workers took to earnings and benefits in the rescue.
The largest US automaker received 49.5 billion dollars from the Treasury and emerged from a bankruptcy restructuring in July 2009.
The report Thursday was its first annual report since raising $23.1 billion in in a public share offering in November.
"Last year was one of foundation building," said GM chairman and chief executive Dan Akerson.
"Particularly pleasing was that we demonstrated GM's ability to achieve sustainable profitability near the bottom of the U.S. industry cycle, with four consecutive profitable quarters."
NEW YORK – Target Corp. reported a 10 percent gain in fourth-quarter profit, boosted by an improving credit card business and solid holiday sales.
The discounter on Thursday reported net income of $1.03 billion, or $1.45 per share for the three months ended Jan. 29. That compares with $936 million, or $1.24 per share, in the same period last year.
The results included an income tax benefit of 7 cents.
Total revenue rose 2.4 percent to $20.66 billion. Revenue at stores opened at least a year also rose 2.4 percent.
Analysts were expecting $1.39 per share on revenue of $20.28 billion.
Target, based in Minneapolis, had struggled with weak sales during the early part of the recession but has seen a rebound since 2009. The retailer's expanded food selection has helped bring in more customers.
The company's business is also benefiting from a discount offer, launched last October, that gives a 5 percent discount for shoppers paying with the company's branded credit card or debit card.
Target said that during the latest quarter the average customer's purchase rose only 0.8 percent but more customers came into its stores, fueling a 1.6 percent increase in transactions. Selling price per item fell 2.7 percent.
Within its credit card segment, profit increased to $151 million, compared with $39 million in the year-ago period, as bad debt expense declined to $83 million, from $284 million in the same period last year.
Target's results stand in stark comparison to those of Wal-Mart Stores Inc. For the past year, Wal-Mart has seen fewer customers coming in the doors as they shop at other rivals like Target.
Wal-Mart reported on Tuesday a 27 percent increase in profit, but posted a 1.8 percent drop in revenue at stores opened a least a year at its namesake U.S. business, which accounts for more than 60 percent of its total business.
DETROIT – General Motors posted a $510 million profit in the fourth quarter and $4.7 billion for the year as it continued an impressive comeback from bankruptcy.
The profits were fueled by strong sales in China and the U.S. as the global auto market began to recover.
GM made 31 cents per share for the quarter, which included $400 million in charges mainly for paying preferred stock dividends and buying preferred stock from the U.S. government. Without the charges, the company earned 52 cents, exceeding Wall Street's expectations. Analysts polled by FactSet expected 49 cents per share.
Revenue for the quarter was $36.9 billion. That also beat analysts' estimates of $34.3 billion.
For the full year, GM earned $2.89 per share on revenue of $135.6 billion.
It was the Detroit company's first profitable year since 2004 and GM's best performance since making $6 billion in 1999 during the height of the pickup truck and sport utility vehicle sales boom.
The full-year profit is impressive considering that from 2004 through 2009, GM was in a state of perpetual restructuring, trying to downsize its work force and shrink its factory capacity to match falling demand for its vehicles. The company lost more than $80 billion during the period and almost ran out of cash in 2008, when the government began a bailout that eventually reached $49.5 billion.
With government financing, GM went into bankruptcy protection in June 2009, leaving a quick 40 days later cleansed of burdensome debt and labor costs. With lower costs and new models such as the Chevrolet Equinox — a small SUV that seats five — GM began its comeback.
Chief Financial Officer Chris Liddell said GM's bottom line also was helped by reductions in debt and pension liabilities following the bankruptcy process.
Shares of GM rose 17 cents, or 0.5 percent, to $34.76 in premarket trading.
GM made less in the fourth quarter than it did during the three previous periods, mainly because of the charges and higher expenses from launching two new vehicles, the Chevrolet Cruze compact and Chevrolet Volt rechargeable electric car.