GM’s failure to match Ford’s profits makes investors doubt about firm’s power

Article by Christian A., on June 7, 2011

General Motors Co.’s Chief Executive Officer Dan Akerson has yet to show investors that the company has the operating efficiency or future product plan that will match the profits of Ford Motor Co., which made 36 percent more money during the first three months of this year, excluding one-time items. This is what Akerson had to say at GM’s first annual meeting since back to being public.

Since its initial public offering of the company in November, the company has been trading 13 percent below its $33 price.

Anticipation around the IPO has brought the company and its biggest investor, U.S. Treasury, to expand the sale to $15.8 billion in common equity plus preferred stock. Since the IPO, the company has tumbled and investors are awaiting a plan that will match Ford's profit or even buy out the government's share, analyst Peter Nesvold at Jefferies & Co. stated.

The analyst further said that the company has managed to keep the business together and brought it far, but the investors have yet to really believe that it is “a new GM.”

The company’s executives have talked about buying stocks from the Treasury, the people familiar with the scenario have disclosed.

Average estimates of ten analysts that Bloomberg has surveyed revealed that the company may earn adjusted net income of $7.72 billion this 2011. Based on the estimates, profit on an adjusted basis in 2012 may increase to $9.55 billion.

Topics: gm

If you liked the article, share on:

Comments

Recommended

Mitsubishi finally introduces the new Xpander MPV at the 2017 Indonesia International Auto Show in Jakarta Indonesia. Replacing the previous Expander, the new multipurpose vehicle will be mostly sold at...
by - August 16, 2017
Infiniti revealed its retro Prototype 9 race car before its slated debut at 2017 Pebble Beach Concours d'Elegance next week. In a recent press release, the company not only disclosed...
by - August 16, 2017
In the United States, not many automakers offer crossovers with a diesel engine option, but Chevrolet does, with their 2018 Equinox. Those who opt for this engine will get some...
by - August 16, 2017
Here are some things that potential buyers of the Ford F-150 and Ford Expedition could look forward to for the 2018 model year. The 2018 models of the F-150 pickup...
by - August 15, 2017
We first saw the McLaren 720S earlier this year when it made its debut at the Geneva Motor Show, and we all agree that it is a beautiful car. But...
by - August 15, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries