General Motors Co. may reveal on Thursday a net income of $1.74 billion for the first quarter ended March 2011, a 63 percent increase, compared to the $1.07 billion recorded during the same period last year.
This information is based on the average estimate of four analysts that Bloomberg has compiled. The sales growth in China and in the United States had helped the automaker to its best first quarter ever since 2000. The estimated results would be the company’s fifth straight quarterly profit since its bankruptcy exit in July 2009.
The performance of the company and the reaction of the market will aid in determining the pace that the U.S. Treasury Department can begin putting its remaining 33 percent ownership on the company into sale. Specifically, the Treasury can file to put its stake on sale as soon as May 22.
It will then track market prices after the earnings are announced, according to an insider. Analyst David Whiston at Morningstar Inc., a research firm in Chicago, stated that it may take several quarters for the company to be able to beat the estimates of analysts to bring the stock price in the high $30s.
He added that the company has not closed above last year’s $33 initial public offering price since March 3 while investors evaluate the amount that the company is outspending its competitors to boost sales. They are also assessing the stability of the management after the departure of Chief Financial Officer Chris Liddell.
nThe challenge for the company, according to Whiston, is to get the investors’ attention while the manufacturers of the Buick, Cadillac, Chevrolet, and GMC cars would post strong results. On another note, the company’s stock increased 2.5 percent, or 81 cents, to $32.99 on the New York Stock Exchange. It has dropped 15 percent from its Jan. 7 closing high of $38.98.