General Motors Co. earned $4.7 billion last year, its first full-year profit since 2004, providing further evidence the automaker’s quick 40-day run through bankruptcy has produced a smaller, more streamlined company capable of earning big profits.
GM also said this morning it will pay out profit sharing checks to 45,000 hourly workers of about $4,300. Another 3,000 workers at GM Components Holdings will get about $3,200.
“It’s the best year of profitability I can see in over a decade,” GM Chief Financial Officer Chris Liddell said, speaking to reporters at GM’s headquarters in downtown Detroit.
The results, released this morning, were on the low side of analysts’ expectations and mark the first annual earnings for GM since the automaker returned to the public markets in November. They are a stark reversal from the $4.4 billion GM lost in 2009 in the months after emerging from bankruptcy.
Revenue for the full calendar 2010 was $135.6 billion.
Fourth-quarter earnings in 2010 fell to $510 million, down from $2 billion in the third-quarter.
Cash flow from its automotive operations was $6.6 billion and free cash flow was $2.4 billion for 2010.
The cash position reflects a $4 billion voluntary cash contribution to GM’s underfunded pensions made late last year. The company’s U.S. pensions were underfunded by $11.5 billion at the year’s end, GM said.
GM ended the year with about $4.6 billion in debt, after making an aggressive effort in 2010 to pay down its liabilities, including those on the books for its pension plans. Liddell has said it’s crucial GM limit its debt exposure to remain profitable during industry downturns and periods of weakened sales.
GM executives had warned last fall that results could weaken in the fourth quarter due to higher costs associated to engineering and new vehicle launches. In the later half of 2010, GM launched the Chevrolet Cruze and the electric, range-extending Volt.
Liddell said the automaker spent about $1 billion more in the fourth quarter on marketing and other launch costs than in any other quarter last year.
The Detroit automaker’s pretax earnings in North America totaled $5.7 billion for 2010, and $800 million in the fourth-quarter.
Overseas, GM earned $2.2 billion in 2010 — its profitability getting a boost by record sales in China, where it’s partnered with Shanghai Automotive Industry Corp., and its success in other emerging markets.
Europe, meanwhile, remains a trouble spot with GM’s losses deepening in 2010 to $1.7 billion before interest and taxes. For the fourth quarter, GM lost $586 million in Europe, compared to $559 million in the third quarter.