General Motors Company (NYSE: GM) is back. That is what the stream of headlines would indicate this morning after the company blew past earnings expectations with a big win. The auto-maker’s earnings almost doubled due to increased market share and higher car prices. The company even went as far as to say that it has put its costs in line with insulating itself against a recession and a slower order environment.
GM said that net income rose to $2.52 billion. That generated $1.54 EPS versus $1.20 EPS from Thomson Reuters. The earnings a year ago were $1.33 billion, or $0.85 EPS. GM’s move to more fuel-efficient and smaller cars seems to be helping even if it is still dependent upon the truck sales for solid profits.
The sales figure came to a gain of 19% to $39.4 billion, which is well above the Thomson Reuters figure of $36.71 billion. This last quarter had fewer sales incentives than the first quarter.
What has to still be considered is that the U.S. Treasury is still a 32% owner of GM, so it is still “Government mOtors” after the bailout. Rival Ford Motor Co. (NYSE: F) did not accept bailout money and does not have Uncle Sam as a shareholder. GM is also still trading as a busted IPO despite the move today.
GM shares were up 2% earlier but the current pre-market indication with over an hour to the open is up 0.85% at $27.40 after a $27.17 close yesterday. The post-IPO trading range is $26.13 to $39.48.
It seems that the market is going to keep an overhang on this stock until the government gets rid of that 32% stake it still holds.
JON C. OGG
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