General Motors Co. reported its highest quarterly profit in more than a decade, helped by fuel-efficient cars and smaller SUVs that were in demand as gas prices marched higher.
The biggest U.S. automaker said Thursday that it earned $3.2 billion, or $1.77 per share, in the first quarter. It was a great start in a challenging climate that would have sunk the company just a few years ago when it was too reliant on gas-guzzling pickups and SUVs for profitS. It was GM's fifth consecutive quarterly profit since late 2009, when it left bankruptcy.
GM's results follow strong earnings reports at crosstown rivals Ford Motor Co. and Chrysler Group LLC, a sign that the U.S. auto industry is recovering well from the recession and bankruptcies.
GM thrived in the quarter by selling small cars like the new Chevrolet Cruze, and efficient crossover vehicles such as the Chevrolet Equinox and GMC Terrain. Revenue rose 15 percent to $36.2 billion, driven by a 25-percent jump in U.S. auto sales and a 10-percent gain in China, which has emerged as GM's biggest market. Sales are so strong that GM almost certainly will retake the title of world's biggest automaker from rival Toyota Motor Corp. this year.
Shares of GM fell 60 cents, or 1.8 percent, to $32.44, in premarket trading.
GM's quarterly profit is more than triple the $865 million, or 55 cents per share, it earned in the first quarter of last year. It's also a good sign for the U.S. government, which is hoping the profit boosts GM's stock price so it can sell its stake in the company and recoup more of the $50 billion taxpayer bailout that saved GM two years ago.
GM's latest results included a $1.6 billion gain from the company's stake in Delphi Automotive LLC, its former parts division, as well as a $400 million charge in Europe because of a change in accounting standards.
The net income was one of GM's best first quarters since 2000, when sales of SUVs and pickup trucks were booming. It also gets GM out of the gate quickly to pass the $4.7 billion it made last year, GM's first profitable year since 2004 and its best performance since 1999.
Among those rooting for GM is the U.S. Treasury Department, where officials will try to figure out the right time to sell the remaining 500 million GM shares owned by the government. GM took nearly $50 billion in U.S. government aid to help it survive in 2009. The U.S. government has been repaid about half that amount and would need to sell its remaining shares for roughly $53 each to get all its money back.
The government can sell its shares starting May 22, but will wait until they hit the right price. GM shares closed Wednesday at $33.03, the first time they closed above the $33 IPO price since March 3.
Without one-time items in the quarter, GM earned $1.7 billion, or 95 cents per share.
That beat Wall Street estimates. Analysts polled by FactSet expected $1.6 billion, or 88 cents per share, on revenue of $35.3 billion. Analysts typically exclude one-time items from their forecasts.
© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.