General Motors Corp.'s (NYSE: GM) first quarter results may not be as bad as they look, even though they are horrendous.
The company missed Wall Street forecasts largely because of losses its former financial business incurred in the suprime mortgage market. Net income was $62 million, or 11 cents per share, compared with $602 million, or $1.06 a year earlier. Revenue fell 16% to $43.9 billion. Excluding one-time items, profit was 17 cents per share. Analysts had expected profit of 87 cents on revenue of $40.9 billion, according to Thomson Financial.
Nonetheless, the automotive business had a $272 million profit, down from $295 million, helped by the cost-cutting undertaken by Chief Executive Rick Wagoner. Profit in the automotive segment on an adjusted basis was $304 million, up from $40 million.
So far, investors have indicated that they believe GM's challenges are more daunting than its rivals. The automaker's shares have lagged both Ford Motor Co. (NYSE: F) and DaimlerChrylser AG (NYSE: DCX).
But has the market unfairly penalized GM? Is all of the bad news priced into GM's stock?
Anyone looking for a true contrarian bet should consider buying the shares. Remember people don't get rich following the crowd.











Reader Comments (Page 1 of 1)
5-04-2007 @ 12:42PM
gumbo said...
GM will not be helped much by doing business in India . I mean GM shareholders... Here is why.. Whateve profits GM gets from India and China and wherever GM goes overseas will be given chiefly to UAW pension coffers growing past $100 billion already. GM management did an excellent job for UAW, yet UAW covered it up by talking down to
management as shoddy and overpaid. UAW is trying to confuse you GM shareholders. What is worse... GM had been selling assets as you know in the recent times. What happens to the sale money GM got? Back to UAW pension coffers, of course.. GM is busy buildig up Daewoo operations, Chinese operations, and now Indian operations plus others I may forget. All of them are just farmed money growing until ripe
enough to be harvested and given to UAW in the future. GM is still able to swing along at depressed stock price and downgraded ratings.
Why? GM bonds is juicy and guess what ? I bet UAW buy a lot of GM bonds either directly or indirectly for cheap as a result of UAW's "beliigrent demands" over the past contract negotations. I call this
a colossal financial manipulation against whom? You GM shareholders and any dinky mutual fund managers holding large amounts of GM stock.
I have a list of those mutual funds holding sizable amounts of GM shares. What are they doing holding them? I will figure it out someday... Some of them are holding 5-10% of GM. Are they bidding their time for the day to come? Or are they just plain dumb managers holding GM stock? What it all boils down is what about you GM shareholders specifically?? You are hung high and dry since 1989 when GM last paid you plum $5 dividends. Since 1989 , GM saved over $30 billions by cutting and half-assed raising your dividends. Now your
dividends is $1, thanks to Kirk Kerkovarian and his MGM Hotel operations. Kirk probably thought he could save UAW workers so they could keep patronizing at his MGM Hotel Casino in , guess where?, DETROIT!! YES VIRGINA THERE IS A MGM HOTEL IN DETROIT !!! I am yelling it out loudly!!! You see, my dear GM shareholders, what can you do about it? SEC watchdogs is sleeping peacefully, really!! Is GM preparing bankruptcy proceedings without you GM shareholders knowing ?
I dont see how GM can waltz along with only $15 billion in GM stock outstanding. Hey, I have more to tell you.. Surprise! GM still has 1.5 billion shares sitting around idly...It is an emergency kit that
GM can crack open and dilute your shares a godawful lot!!! You will be bammed on top of your heads and you will wonder what the **** happens!! It is time for you to wake up and start asking around before it is too late... UAW is still talking tough heading into this summer when contract negotations is up for renewal. Will management bow down like wussies as always? If not, will UAW be shown out the
doors and then kicked into the nearby trash bins?? Can GM go non union? What is stopping GM from going non union to save itself, I stand to reason.. Am I wrong? I do not read the so called National
Labor Code written a long , long, long time ago back in the 1930's.
It was back when everything is aplenty and cheap. I can go on and on......Yeah, I have more ideas about the stupid crummy GM dilemma!!!
5-04-2007 @ 12:41PM
gumbo said...
When GM profits goes up, UAW says Gimme more gimme more. GM profits then sank again. Up and down and down and down and up and down and down and down and up and down and down and dnown and up.... GM is back to the depression era of the 1930's now. UAW still says Gimme more, gimme more!!! Not worth keeping GM!!
5-04-2007 @ 12:42PM
gumbo said...
UAW says gimme more , gimme more, gimme more... Still want to hold GM with UAW ? Forget it!
5-04-2007 @ 11:08PM
Zach said...
GM is starting its long return to profitability , but not so much by selling cars , it was by taking some of the health-care money it gets for retirees and, eliminating the pay raise for the current work force in the last year of the current contract . So the money they get is being used to keep its global position in positive ground . And now building plants in India and China . Soon they will export those vehicled to the USA , and all the gumbo's in the world will scoop up these foreign made cars , and let GM's operations here at home continue to struggle .