General Motors, facing a rapidly diminishing liquidity position due to declining sales and escalating labor costs, succumbed to bankruptcy in June 2009. A month later, following a $50 billion U.S. government-led bailout, General Motors exited bankruptcy protection, with the U.S. government taking a 61% stake in the auto maker.

Now General Motors Company (GM), second only to Toyota in global auto sales, has reported its fifth consecutive profitable quarter, posting net income of $3.2 billion, or $1.77 per fully-diluted share. Revenue in the first quarter ended March 31 increased $4.7 billion to $36.2 billion, compared with the first quarter of 2010.

GM delivered 2,221,000 units in the first quarter, for an 11.5% market share, up from the 11.1% share in the first quarter of last year. In the U.S., 684,000 units were sold in the first quarter of 2011, for a 19.0% market share, up from 18.4% in the same period in 2010.

"We are on plan," said Dan Akerson, chairman and CEO, in a press release. "GM has delivered five consecutive profitable quarters, thanks to strong customer demand for our new fuel-efficient vehicles and a competitive cost structure that allows us to leverage our strong brands around the world and focus on driving profitable automotive growth."

The Detroit, Michigan-based automaker reported a gain of $1.6 billion from the sale of its stake in former parts unit Delphi Automotive LLP. It also posted a gain of $339 million from the sale of preferred stock in Ally Financial Inc., formerly the automaker's GMAC Inc. unit. In total, special items boosted GM's net income by $1.47 billion in the first quarter.

GM said available liquidity is $36.5 billion as of March 31, 2011.

According to Bloomberg News, GM's first-quarter North American profit disappointed investors as higher operating expenses, including marketing and sales incentives, cut the company's profit by $700 million. The rising costs denied investors the results they expected and contributed to the stock's biggest decline in more than two months, Adam Jonas, an analyst with Morgan Stanley, said in a telephone interview with Bloomberg. The stock dropped 3% following the release of the first quarter results. GM's shares have dropped 13% this year.

GM has discontinued no-longer profitable brands like the Pontiac, Saturn, and Hummer following its bankruptcy reorganization. Brands that remain in GM's portfolio are the Buick, Cadillac, Chevrolet, and GMC. GM has been struggling to retain customers who previously drove brands that have been shuttered. It spent on incentives in January and February in order to regain market share in the highly competitive U.S. market.

Ford Motor Co. (F), second to GM in U.S. auto sales, had a 22% rise in first quarter net income to $2.55 billion. The third member of Detroit's Big Three, Chrysler Group, which exited bankruptcy after being sold to Fiat, posted a profit of $116 million, its first quarterly net profit since exiting bankruptcy in 2009.

Boost From China

General Motors said its GM International Operations segment, which include China, fell to $480 million in the first quarter from $908 million a year earlier. Sales for the unit rose 8.2% to about 855,000 vehicles in the quarter. In China alone, GM sold 686,000 vehicles in the quarter, up from 576,000 units in the fourth quarter and 624,000 in the first quarter of last year. GM has a 13.6% market share in China.

There were 433,000 deliveries in Europe, up from 404,000 in the first quarter of last year. The pretax loss in GM Europe operations narrowed to $390 million from $477 million. GM said it plans to break even in Europe by the end of 2011.

GM South America sold 250,000 units in the first quarter, only slightly up from 241,000 the year before. Market share in the region dropped to 18.8% from 19.6% in the fourth quarter and 20.7% in the first quarter of 2010.

GM could retake the crown for most global auto sales from Toyota this year as the Japanese automaker has lost production because of plant shutdowns following the March 11 earthquake in Japan.