General Motors posts huge increase in second quarter profit, says full-year outlook “solid”

General Motors provided a little ray of sunshine on an otherwise bleak economic landscape Thursday with the announcement that its second quarter profits had almost doubled to a better-than-expected $2.5 billion.

As the Dow Jones slumped amid fears of a U.S. economic reversal and with the debt crisis still in the back of investors' minds, GM showed that it was not all doom and gloom for American companies.

The car maker's sixth-straight quarterly profit soared 92 percent over 2010, helped by a turnaround in its troubled European unit, improved market share and higher prices for its vehicles, The Wall Street Journal reported

In only its second full quarter since re-listing on the stock market following its forced restructuring, GM said revenues were up 19 percent to $39.4 billion.

GM North America was $2.2 billion in the black, compared to $1.6 billion a year ago, while the European operation pocketed $102 million against a $160 million loss the previous year.

"It’s a solid quarter … profitable in every region of the world — that’s an important first for us," Chief Financial Officer Dan Ammann told reporters, according to the Detroit Free Press.

"There’s an increased amount of uncertainty out there … What we’ve done successfully is configure the business with a low break-even point and a strong balance sheet so that we can handle whatever scenario comes along."

Total net income came to $1.54 a share from a year earlier, topping analysts' predictions of around $1.20 a share, Detroit Free Press said.

GM clawed its way out of bankruptcy in 2009 after a $52 billion bailout courtesy of the U.S. taxpayer. The government still owns 32 percent of the carmaker's ordinary shares.

The company's shares closed Wednesday at $27.17 in a weak market, well below its initial price of $33 in November. Detroit Free Press said Treasury is "waiting for the market’s reaction to second-quarter earnings before deciding whether to sell shares in the next couple of months."

It said the IPO price would be a minimum target for the government to sell its stake, even though to break even on its $49.5-billion investment the rest of its shares wold have to fetch around $53 apiece.

The company said second-half earnings would likely be "modestly" weaker than the first, but the outlook for the full year indicated "solid improvement over 2010."

"GM's investments in fuel economy, design and quality are paying off around the world as our global market share growth and financial results bear out," chief executive Dan Akerson said.