By David Bailey and Kevin Krolicki
DETROIT (Reuters) - General Motors Co posted its biggest quarterly profit in six years on Thursday, a day ahead of an expected IPO filing that will clear the way for the U.S. government to relinquish its majority stake in the top U.S. automaker.
GM reported second-quarter net earnings of $1.3 billion, compared with $865 million in the first quarter.
The second-quarter profit was the largest since 2004, when the U.S. auto market was still booming with annual sales of near 17 million vehicles and GM's brands accounted for more than one in four purchases of new cars and trucks.
The results reflected a 47 percent surge in global production from the depressed levels of a year earlier when GM began operating under bankruptcy protection in a restructuring that included $50 billion in U.S. government funding.
The stronger profit also showed the gains GM has made from cost-cutting during bankruptcy and stronger sales in overseas markets led by China.
Revenue rose to $33.2 billion from $31.5 billion in the first quarter, boosted by stronger results in North America.
GM Chief Executive Ed Whitacre had said last week that the quarterly results would be "impressive," and analysts expect the company to cite its two quarters of consecutive profits to build the case for a stock offering expected to be the largest ever for the U.S. market.
Analysts say GM's restructuring has demonstrated it can be profitable even in a still-weak U.S. auto market where sales are running at just over 11 million vehicles.
"Over time, they are going to be printing money. They are set up to break even at the bottom," said Morningstar analyst David Whiston.
Europe, where GM is still struggling to restructure its Opel unit, remained a notable weak link for the automaker with an operating loss of $160 million.
North America had an operating profit of $1.6 billion. International operations, including GM's China joint ventures with SAIC and Wuling, had an operating profit of $672 million.
SNAPPING A LONG LOSING STREAK
GM lost about $88 billion between 2005 and 2009 when it was driven into bankruptcy by plunging sales and tight credit.
The last time the automaker had consecutive quarters of profits was in 2004, when it had a 26-percent share in a U.S. auto market that was near record-high levels.
GM's U.S. market share was just over 19 percent in the quarter that ended in June, down from almost 21 percent a year earlier when it was still selling the now-scrapped Saturn, Saab, Pontiac and Hummer brands.
Since GM remains privately held Wall Street equity analysts had not released earnings forecasts for the automaker.
GM's results show it is trailing its more successful and smaller rival Ford Motor Co, which posted a second-quarter profit of $2.6 billion, but ahead of Chrysler, which lost $172 million.
The turnaround in GM's North American operations was most striking from a year ago. In the most recent quarter, GM ran its North American factories at 93 percent of capacity, compared with 39 percent a year earlier.
Sources told Reuters on Wednesday that the largest U.S. automaker had secured a $5 billion credit facility, marking its return to the capital markets a year after it emerged from a government-funded landmark bankruptcy.
The credit facility was a last hurdle toward filing for an initial public offering of stock that allows the U.S. Treasury to reduce its nearly 61 percent stake in GM -- and the automaker to begin to shed its "Government Motors" label.
The filing for GM's IPO is expected on Friday.
The $27 billion in bonds issued by the pre-bankruptcy GM represent a 10 percent equity stake in the new company under the terms of the restructuring negotiated by the White House.
GM's 8.375 percent bonds due in 2033 rose less than a penny on the dollar to 35.75 cents in early trading on Thursday, yielding almost 24 percent.
The bond price has climbed from trading at 31 cents in early July, when the yield was more than 27 percent, according to MarketAxess data.
The higher bond price suggests that investors are placing a higher implied equity value on the automaker, which is expected to launch its stock offering by late November.
Second-quarter results were not directly comparable to the year-earlier period because GM was operating in Chapter 11 for part of the second quarter in 2009.
(Additional reporting by Bernie Woodall; Editing by Maureen Bavdek)
