[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]
|
Status: Not Logged In; Sign In
Economy Title: Government Motors Falls Below IPO Price as Rising Oil Dims Truck Sales Outlook Feb. 24 (Bloomberg) -- General Motors Co. fell to the lowest since its initial public offering in November as rising oil prices dimmed the outlook for truck sales after the largest U.S. automaker’s most profitable year since 1999. GM slid $1.89, or 5.5 percent, to $32.70 at 1:21 p.m. in New York Stock Exchange composite trading. The drop marked the first day GM traded at less than its $33 initial offering price in November. Chief Executive Officer Dan Akerson is speeding the development and introduction of new models, including more fuel- efficient cars that may sell better as gas prices rise. GM used larger discounts and sales incentives in January and February to lure buyers before vehicle introductions pick up in 2012. “The worst-case scenario is that GM uses pricing to get them through this gap in new product they’re in, and then you combine that with oil spiking,” Nicholas Colas, chief market strategist at BNY ConvergEx Group in New York, said in a telephone interview. Crude oil for April delivery reached $103.41 today, the highest intraday price since Sept. 29, 2008, on concerns an uprising in Libya may reduce supply. GM, which emerged from bankruptcy in July 2009, today reported fourth-quarter net income of $510 million and $4.67 billion for 2010, the largest annual profit since its predecessor earned $6 billion in 1999. The full-year comparison excludes a $127.1 billion profit in the third quarter of 2009, when GM accounted for its post-bankruptcy recapitalization. Fourth-Quarter Profit Net income in the quarter was 31 cents a share, Detroit- based GM said today in a statement. Excluding a charge related to a purchase of preferred shares from the U.S. Treasury Department, profit was 52 cents a share. The average estimate of 13 analysts surveyed by Bloomberg was for profit of 44 cents. Sales rose to $36.9 billion, topping the $34.6 billion average estimate. Revenue for 2010 climbed to $135.6 billion. The drop in GM shares may be an overreaction to events in Libya and rising oil prices, said David Whiston, an equity analyst with Morningstar Inc. in Chicago. There was no fundamental change in GM’s performance that would scare investors away from the stock, he said. GM increased fourth-quarter truck production 22 percent from a year earlier to about 463,000 units, while car production rose 2.1 percent to about 240,000 vehicles. The inventory of trucks could be a concern if oil prices rise because of violence in the Middle East, said Whiston, who has a $46 target price on GM’s shares. Whiston said oil prices would have to stay elevated to change his outlook on GM. “If this is temporary, I won’t change my valuation at all,” Whiston said. --Editors: Kevin Orland, Cecile Daurat. To contact the reporters on this story: Craig Trudell in Detroit at ctrudell1@bloomberg.net; David Welch in Southfield, Michigan, at dwelch12@bloomberg.net. To contact the editor responsible for this story: Kevin Orland at korland@bloomberg.net.
Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest
#1. To: All (#0)
Trucks? Aren't they the atmosphere poisoning gas guzzling Global Warmers? Wasn't the money Obama confiscated from the next 3 generations supposed to make the plug-in Volt the money maker?
|
|
[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]
|