DETROIT -- General Motors Co. says it rode cost cuts and strong sales of new models to an $865 million first-quarter net profit, boosting its plans to go public.
The automaker posted an operating profit of $1.2 billion from January through March, while generating $1 billion in free cash flow. GM was able to match the industry's 16 percent U.S. sales gain in the first quarter despite selling Saab and winding down Hummer, Saturn and Pontiac.
The figures reinforce the projections of CEO Ed Whitacre, who said last month the quarter would show "solid operating results" and pave the way to a possible initial public stock offering as soon as late 2010.
CFO Chris Liddell today put some conditions on that timing. GM will make an IPO only “when the markets and the company are ready,” he said in a conference call. “What's out of our control are the readiness of the markets and the status of the global auto industry.”
In addition, GM Controller Nick Cyprus cautioned that GM must further refine its internal financial controls before company managers have a clear view of financial performance. He expressed optimism that would be accomplished before an IPO.
The U.S. Treasury Department is currently interviewing Wall Street bankers to advise the government on a GM IPO, the Wall Street Journal reported. Among the firms competing for the advisory role are Greenhill & Co, Lazard Ltd. and Perella Weinberg Partners, the newspaper said Saturday, citing sources.
Wall Street analysts have said investors would need to see two consecutive profitable quarters before an IPO could be successful.