To me, General Motors Corp. (NYSE: GM) is beginning to take on the persona of Rocky Balboa, the consummate tough guy who is winning against all odds. Forget for a moment who sells more autos and just look at all the smart work it has taken to get GM this far in the struggle to effectively manufacture and market automobiles. Take a contrasting look at the last few week's announcements from America's auto manufacturing block. Take a look at the news about Ford (NYSE: F) and Chrysler in contrast to what you hear about GM. It is my opinion that of those three, GM is the only company which has a realistic grasp on what it must do to survive and regrow.
General Motors posted 2007 second-quarter adjusted net income, excluding special items, of $1.4 billion, or $2.48 per diluted share, compared to $1.1 billion, or $2.03 per diluted share, in the year-ago quarter. However, bear in mind that while GM increased its market share over 9% outside of North America, it's global market share was down 0.4%, meaning that there was a decline in the number of vehicles sold at home. Current analyst consensus is a quiet hold on GM. I would take that position also, but overall I expect GM shares to move steadily upward as company outlook improves.
A trending comparison between GM and its peers shows that the company has much work to do. Within its own fiscal history, the company looks respectable, but among the industry leaders they're not yet getting it done. I do see GM getting leaner, fitter, and more aggressive, the type of thing needed in today's manufacturing climate. I hold very high hopes for Chevy Volt, and I opine that GM has a business plan that features long-range vision encompassed in the high-quality execution of timely and desirable engineering.
Analysts are providing an average EPS estimate of $0.32 for Q3 2007, then their estimates begin to rise for Q42007 and remain steady going forward. I'm looking for earnings to be reported in the range of $0.41 to $0.45, and a bit more wouldn't surprise me based on what I've read, seen, and heard.
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Reader Comments (Page 1 of 1)
11-05-2007 @ 12:37PM
vcs745 said...
I am beting that General Motors stock will go higher, in the range of $55, maybe $58 by the end of the year....Core suppliers will enjoy for the first time the ability to lock in longer term contracts (4 yr. wage freeze) with their suppliers...a win-win situation, especially for the consumer of the GM product.
11-05-2007 @ 12:37PM
John said...
GM has made great progress in solving their problems. If they keep up the good work, I believe, they will rule once again.
11-05-2007 @ 12:43PM
jpdr1100 said...
IMO, it's still a long shot, but GM is saying and doing all the right things.
11-07-2007 @ 2:18AM
Amy said...
Based on my current situation with GMAC, its going to take alot of effort from the top executives to really pull things together. They lack organization skills, customer service support and definitely the desire to obtain new business is not at all their priority.
11-08-2007 @ 12:53PM
Roy Mustang said...
Ouch.
And just remember, GM had OVER-REPORTED its earnings per share by about $5.00 per share each quarter (a loss of $69 per share total for the last 3 years).
Of course, it doesn’t help GM that they owe $40 billion dollars more than what they own…