Stock Market Watch

GM Shares Drop on Outlook

by ·




General MotorsShares of General Motors Company (NYSE: GM) have fallen sharply in pre-market trading today even as the Detroit, Michigan-based automaker reported better than expected third-quarter earnings. The stock is falling after the automaker backed away from its full-year break-even target in Europe.

For the third quarter of 2011, GM reported net income of $1.7 billion, or $1.03 per share, compared with $2 billion, or $1.20 per share reported for the same period in the previous year. The company’s third-quarter profit came in well ahead of expectations of $0.96 per share.

GM’s revenue for the third quarter of 2011 came in at $36.7 billion, up from $34.1 billion. The company’s revenue for the quarter came in-line with estimates. However, GM’s margin for the quarter fell from 6.7% to 6%.


Dan Akerson, CEO of GM, said that the company delivered a solid quarter but solid is not good enough even in a tough global economy.

Despite GM’s strong third-quarter financial results, its outlook is downbeat. The automaker backed away from its full-year target for Europe due to the uncertainty there. GM said that it does not expect to break even in Europe before restructuring costs due to deteriorating conditions there. CFO Dan Ammann said that there are significant macroeconomic challenges to address and the company is not relying on the big pickup in volume in the industry to bail it out. Ammann said that the company is focused on getting the break even point down even further so it can get to a point where it is sustainably profitable.

The downbeat outlook has pushed GM shares sharply lower in pre-market trading. GM shares are down 7.35% to $23.20 in pre-market trading today.

GM shares are trading well their IPO price of $33. Since completing the IPO almost a year ago, GM shares have fallen 26.76%. Year-to-date, the stock is down 32.07%.

 

edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


Tags:

Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

You may also like...