After GM Stock Rebound, All Eyes on Earnings, Sales

[Ming]

GM's Earnings, Sales Eyed
July 18, 2008: 11:54 AM EST

DETROIT -(Dow Jones)- GM's shares are up nearly 60% since hitting a fresh 50-year low on Monday, when concerns were rising about the auto maker's financial health amid a sharp downturn in sales, particularly of highly profitable pickup trucks and sport- utility vehicles.

Sentiment got a boost from the announcement Tuesday of a sweeping plan to cut $10 billion in costs and raise an additional $5 billion through asset sales and financial markets. Declining oil prices also provided a boost, sparking hopes that the steep drop in sales of large vehicles could moderate if fuel prices eased.

Recently the stock was up $1.12, or 8.7%, at $13.96, trading at its highest level in nearly a month. The stock, which is up from a low of $8.81 on Monday, is still down 44% year-to-date.

The latest restructuring moves by GM, which says it will have enough cash to weather the downturn through 2009, allayed investor fears of an impending bankruptcy, especially since GM's plan won't rely heavily on cash from the strained financial markets.

But in announcing the liquidity-boosting plan, the company also said that it expects to report significant losses when second-quarter financial results are announced in the next few weeks. GM hasn't announced a date for the release of its quarterly financial report.

July sales results, set to be released Aug. 1, could bring more bad news for GM and its Detroit-based counterparts, which continue to lose market share to foreign-based rivals.

Meanwhile, the same pressures that have driven GM shares to historic lows remain: a battered U.S. economy, high fuel and commodity prices, and consumers' dramatic shift away from profitable pickups and SUVs. The Big 3 U.S. auto makers rely much more than their foreign counterparts do on sales of large vehicles.

"The key issue for GM is that while the announcement earlier this week will provide confidence, it simply buys them time," said Calyon Securities analyst Mark Warnsman said. "It is not clear to me GM has a distribution network in the U.S. strong enough to convince Americans they should be buying American cars."


SOURCE

[jbernie]

Originally Posted by Ming

July sales results, set to be released Aug. 1, could bring more bad news for GM and its Detroit-based counterparts, which continue to lose market share to foreign-based rivals.

And maybe anyone else who has a vested interest in the sales of suvs & trucks... espcially the full size ones. Toyota does have the cars but at the same time they are still wanting suv/truck sales for profit and unless they sorted out their supply issues they will see more drops in Prius sales, or at least no increase as they don't have the supply.

Toyota has done enough to count as a serious player in trucks/suvs, it will be interesting to see how someone like Nissan does given they are playing a minor role at most these days, at least in the full size market.

[tollytime]

$13 bucks is a rebound? They were at $43 a year ago. Umm, noooo. It's called the Dead-Cat-Bounce. You have millions of small time individual investors looking to double their money on pure speculation and greed. If you kick a dead cat, it will bounce. Ford stock has had the same up and down manipulation over the past two years.

[ChevroletRevived]

Well, some people already have made some money. Hardly much of a rebound though, $13 is still WAY too low. Hopefully, sales won't fall off a cliff for July and the price will go up. As for earnings, it depends what the market is expecting. If they're expecting $1 billion losses a month, the news is going to be better then that.

[FenwickHockey65]

Hopefully sales figures will be good...not so sure about earnings...

[GM-Joe]

GM cars do sell, as long as it isn't in suburbia. As soon as you leave suburbia into rural areas, 3/4 of the cars are from American brands and the pickups probably 19/20.

[Hitman1970]

And where do most of Americans live again?

[vcs2600]

Originally Posted by Hitman1970

And where do most of Americans live again?

Suburbs 50%, Cities 30%, Rural 20%

http://en.wikinews.org/wiki/US_popul...es_300_million

[jcgable]

Originally Posted by vcs2600

Suburbs 50%, Cities 30%, Rural 20%

http://en.wikinews.org/wiki/US_popul...es_300_million

Exactly.

[paul8488]

Oh dear... just like this oil... they're asking if the bubble has burst. Riiiight... because one day of up or down stock market activity can be counted on. Sheesh! Bet GM is redesigning the Yukon right now.

[dindak]

I'm up $3 / share +, I am happy so far. Profit might help pay for my new GM car if it can keep going.

[1487]

people of a certain income level seem unlikely to consider american cars and the suburbs tend to have the most educated, highest income folks. Since cars are largely status symbols many people arent going to drive a car they feel represents them poorly and in many cases domestics are those vehicles. This is the harsh reality that is going to be difficult to reverse but time can change things. Toyota is seen in much higher regard by 50 year olds than by 25 year olds. I dont know too many young people who are enamored with Toyotas and they are also less likely to disregard a nice looking American car simply based on the badge.


We can fire Wagoner and Lutz but certain things arent going to change regardless of who is running GM. Simply installing new management isnt going to make die hard import drivers suddenly think Americna cars are cool.

[Ming]

Originally Posted by 1487

We can fire Wagoner and Lutz but certain things arent going to change regardless of who is running GM. Simply installing new management isnt going to make die hard import drivers suddenly think Americna cars are cool.

I know how they think, I'm surrounded by them.

How could GM become "cool" overnight? How could they get the environmentalists, latte-sipping non-blue collar Democrats, and other import-lovers to change their attitude about GM cars?

One person:

Steve Jobs



Sure there would be questions about his experience in the auto industry, but there would be no question about his drive to make "cool" things, and create positive buzz over product.

GM could become trendy within a couple of years under Jobs.

At the very least, a young Jobs type who understands technology trends and what's hot in smaller cars replacing Lutz very visibly with multiple press conferences would do wonders to eliminate this SUV-centric foot-dragging "no one wanted small cars" image GM has now like an albatross around its neck.

Bob seems to think that dismissing and insulting the consumer and GM fan is the answer to every botched PR move like showing the Triplets with no intention of selling them here.

[Buickman]

FIVE BUCKS by mid August. remember where you heard it.

ps

it ain't worth the fiver.

[fp115]

Steve Jobs would be the worse candidate to be on the board at GM. People are already complaining that GM vehicles lack certain features. He is unable to gather very much employee enthusiasm and from what I hear many hate walking by him due to the simple fact that he isn't always the greatest guys.

As many I am sure you don't know is that Jobs is being investigated for fraud by playing with the Apple stock and isn't well liked within the board. Jobs only looks good to the public, but in the workplace he is hated.

The iPod is going in the wrong direction now and is losing marketshare to many other music players. The iPhone although a great launch is plague with many bugs, missing important features, not compatible with most important systems and takes Apple months to address issues. All Apple products are released half assed and are expected to get better through updates, not be perfect as an initial product. Steve is just ridding the wave as GM did and Apple will fall quick.