David Shepardson / Detroit News Washington Bureau

General Motors Co. today reported net income of $1.33 billion in the second quarter -- its second consecutive three months in the black -- as it prepares to offer a public stock sale by year's end.

It came as GM CEO Edward Whitacre announced he would step down on Sept. 1 as CEO and will remain as chairman of the board until the end of the year. GM board member Dan Akerson will take over as CEO in the coming weeks and will assume the chairmanship next year.

The company's performance was up from the first quarter when it reported $865 million in net income -- GM's first profitable quarter since 2007. GM chief financial officer Chris Liddell cautioned that GM's financial results for the rest of the year will "moderate," but said that GM will show "solid profitability" for all of 2010.

Today's earnings statement is being keenly watched by market analysts; GM has been majority-owned by the government since it left bankruptcy protection in July of 2009 and is eager for the Treasury to sell off its stock.

The automaker is expected to file paperwork as early as Friday to set the wheels in motion for a public stock sale. But GM officials said Thursday that with Whitacre's sudden departure, the filing could be delayed until early next week.

It is also expected to announce soon that GM has secured a $5 billion revolving line of credit -- a key step toward a public stock sale. Whitacre said last week that GM was close to finalizing it. Liddell declined to update the status of obtaining the credit line.

GM said today it had improved results across the globe; in North America, it earned $1.6 billion before interest and taxes, up from $1.2 billion. It narrowed its losses in Europe to $200 million in the second quarter, down from $300 million.

"I am pleased with our progress on achieving our business objectives," Liddell said. "We have delivered strong product, maintained cost discipline, progressed strategic initiatives, such as restructuring Europe and acquiring (subprime lender) AmeriCredit, and delivered two consecutive quarters of profitability and positive cash flow."

The Detroit automaker's revenue in the first half of the year grew to $64.7 billion, up from $45.5 billion. GM earned $2.2 billion in the first six months of 2010, compared with an $18.9 billion loss in the first half of last year.

GM said it lost $12.9 billion in the second quarter last year, when it spent part of the period in bankruptcy protection.

GM is the last of the Detroit automakers to report second-quarter results. Ford Motor Co. made $2.6 billion, its fifth straight quarterly profit. Chrysler Group LLC, which got $15.5 billion in federal aid, narrowed its second-quarter loss to $172 million.
More work ahead

Today's results, while promising, show areas where GM needs to make progress. Its U.S. market share fell in the first six months to 18.9 percent, down from 20.5 percent over the same period in 2009. GM also said fleet-sales -- less profitable sales to rental car agencies and governments, among others -- rose to 32.3 percent in the first of 2010, compared with 23.8 percent last year over the same period. Liddell said the fleet sales should shrink in the second half as a percentage of its total sales.

Liddell says GM's U.S. market share was stabilizing as it focused on its four remaining brands -- Chevrolet, Buick, Cadillac and GMC. As part of its restructuring, the automaker shed four other brands: Hummer, Saab, Saturn and Pontiac. GM also said it was boosting average transaction prices

But GM said its global market market share increased from 11.1 percent in the first quarter to 11.6 percent in the most recent quarter.

On the employment front, GM said it has added 2,000 hourly jobs in the United States over the last six months, to 53,000 workers. Worldwide employment, however, has fallen to 208,000 from 215,000, after the sale of its Saab unit. Its worldwide payroll is $6.1 billion for the first half of the year, up $200 million from the previous six months.

GM must also deal with its underfunded pension plans worldwide. GM's pensions are underfunded by $26.4 billion, a $500 million improvement from the previous quarter.

The company sold 1.28 million vehicles in North America in the first half of the year, up from 1.16 in the same period last year. Worldwide sales totaled 4.15 million vehicles from April through June, up from 3.55 million in the first half of last year.

It said today it is now using nearly all of its factories. In the last three months, GM was using 93 percent of its capacity, up from 39 percent in the same period last year.

The company's cash and marketable securities on hand have fallen to $32.5 billion from $35.7 billion at the end of the first quarter. GM used a chunk of the cash to repay its outstanding $6.7 billion in U.S. government loans and $1.4 billion in Canadian loans.

The company had positive cash flow for the second straight quarter. Cash flow for operating results was $3.9 billion, and after adjusting for capital expenditures of $1.1 billion, free cash flow was $2.8 billion -- up from $1 billion in the first quarter.