Earnings Preview: General Motors Corp.

[nyscene911]

Earnings Preview: General Motors Corp.

NEW YORK (AP) - General Motors Corp. reports earnings for the fiscal second quarter on Wednesday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: All three of the Detroit automakers posted declines in June auto sales, prompted by higher gas prices and tough comparisons with the start of last summer's heavy incentives.

In addition, GM's ongoing restructuring programs is also expected to impact the Detroit-based automaker as it struggle to right-size its operations and deal with mounting pension and health care costs.

GM, the world's largest automaker, saw its sales plunge 25.7 percent last month as it faced difficult comparisons to June 2005, which featured the kickoff of a sales incentive that allowed consumers to buy vehicles at employee prices.

Company officials said high gas prices pushed truck sales down 37 percent in June, while car sales were down less than half a percent.

GM also said in June that about 35,000 hourly workers agreed to retire early or accept a buyout offer as part of the automaker's plan to cut its 113,000-person U.S. hourly work force by 30,000 and close 12 plants by 2008.

GM expects to take a $3.8 billion after-tax charge to pay for the buyouts and retirements.

GM's cross-town rival, Ford Motor Co., is also in the midst of a restructuring program and said last week that it posted a second-quarter loss of $123 million.

BY THE NUMBERS: Analysts polled by Thomson Financial expect GM to earn 52 cents per share on $42.59 billion in revenue in the second quarter.

ANALYST TAKE: Joseph C. Amaturo of Calyon Securities said his firm continues to believe that GM is in a better financial position than Dearborn, Mich.-based Ford and recommended that investors buy GM shares ahead of what he expected to be a "strong earnings release."

"In addition to the material year-over-year as well as sequential earnings improvement, particularly in the company's hugely important North American automotive operations, we expect strong results from GM's other regions," Amaturo wrote in a report issued Wednesday.

"Although they are considerably less important to the company's near-term profit turnaround, they represent regions of the world that are expected to post more meaningful longer-term future sales growth for GM."

WHATS AHEAD: GM has begun 90-day talks with Japan's Nissan Motor Co. and Renault SA of France, about a possible alliance between the three companies.

Carlos Ghosn, chief executive of both Nissan and Renault, said last week that the talks are simply studying whether a tie-up with GM makes sense, but they will not address the possibility of holding capital stakes in each other.

STOCK PERFORMANCE: GM shares rose about 42 percent in the quarter to close at $29.79 on June 30 on the New York Stock Exchange. So far this year, GM shares are up 52 percent to close Friday at $28.98.

[!!!TED!!!]

Since about May of this year, GM stock has been slowly rising, while Toyota stock has been slowly dropping. Hmmmmm....

http://www.investorguide.com/stock.cgi?ticker=GM

http://www.investorguide.com/stock.cgi?ticker=TM

see attachment...

[Newbiewar]

yea... i think its been a buy since they posted their first profit... last quarter

but we'll see if that is possible to continue such efforts

[usa1]

Since about May of this year, GM stock has been slowly rising, while Toyota stock has been slowly dropping. Hmmmmm....

http://www.investorguide.com/stock.cgi?ticker=GM

http://www.investorguide.com/stock.cgi?ticker=TM

see attachment...

170671[/snapback]

And yet Toyota is worth more than 10 times GM. Sigh.

Mark

[Cadillacfan]

True, but I think with all the recent bad press Toyota has been getting with the recalls, the fact that GM's getting it's act together (albeit slowly), and the prospect of a merger with Renault/Nissan, GM's stock value will only continue to rise. Meanwhile, some Toyota shareholders are losing confidence in the company's economic stability, and that's saying a lot about a company as "perfect" as Toyota.

Do I think the drop will continue? No, but at least we know that Toyota isn't going to destroy the American automotive industry as fast as some people are predicting.

[MyerShift]

If I didn't want to deal with a broker and whatnot (you know, get it on my own) I would buy GM stock.

Build it up little by little.

The automotive industry is cyclical.

[ellives]

It's not a "merger" that is being discussed. Let's get this term out of the dialog. It just adds to the misconception and misinformation that's being bandied about.

True, but I think with all the recent bad press Toyota has been getting with the recalls, the fact that GM's getting it's act together (albeit slowly), and the prospect of a merger with Renault/Nissan, GM's stock value will only continue to rise.  Meanwhile, some Toyota shareholders are losing confidence in the company's economic stability, and that's saying a lot about a company as "perfect" as Toyota.

Do I think the drop will continue?  No, but at least we know that Toyota isn't going to destroy the American automotive industry as fast as some people are predicting.

170839[/snapback]

[jbartley]

Buy now? People should have been buying back in the the spring!

[zhawk]

And things continue to look up. Hopefully, GM continues to bring stronger and better products to market and keeps this going!

[FUTURE_OF_GM]

And yet Toyota is worth more than 10 times GM.  Sigh.

Mark

170804[/snapback]

Actually.... One NYSE share of Toyota actually represents 2 actual shares of Toyota.

So, if Toyota's stock is at say $84 on the NYSE, it's ACTUAL value is $42 per share.

Of course, most in the media are too stupid to know that and so the story goes...

[Drew Dowdell]

I buy the same dollar amount of GM stock every month <dollar cost averaging> and have been ever since Kirk started making his bids.

BTW, +.39 as of 11:40am.

broke the 30 dollar mark today

[Imaj]

GM is making a comeback, Hopefully this quarter their profits will hit the $1 billion mark, let's just hope that it wont be bought by Renault-Nissan

[evok]

Actually.... One NYSE share of Toyota actually represents 2 actual shares of Toyota.

So, if Toyota's stock is at say $84 on the NYSE, it's ACTUAL value is $42 per share.

Of course, most in the media are too stupid to know that and so the story goes...

171044[/snapback]

If you want to be technical NYSE trades the TM ADR = 2 shares.

And if you would have actually bothered read the article that is posted in this thread, Toyota is not even mentioned.

Media is Stupid?

Edited July 25, 2006 by evok

[jbartley]

If you want to be technical NYSE trades the TM ADR = 2 shares.

And if you would have actually bothered read the article that is posted in this thread, Toyota is not even mentioned.

Media is Stupid?

171071[/snapback]

And since when discussion only limited to what's in the article...

[evok]

And since when discussion only limited to what's in the article...

171099[/snapback]

HUH

[supermoto]

Actually the share price has no direct corrollation to value of the company. The number of outstanding shares times the value of those shares is the market capitalization.

Ironically Toyota had 30 times the revenue of Harley Davidson, but only 15 times the net income, which is why the market values Toyota only 15 times higher than HD. At leats that was the numbers a few months ago. With Toyota down 10% from its high tis year it could be different.

I guess buying GM or HD stock in January would have been a been better than Toyota.

[ellives]

Huh? Of COURSE the share price has a direct correlation. You just pointed out the formula. What you MEAN to say is stock price ALONE is not indicative of valuation so comparing companies based on stock price alone is useless.

Actually the share price has no direct corrollation to value of the company. The number of outstanding shares times the value of those shares is the market capitalization.

Ironically Toyota had 30 times the revenue of Harley Davidson, but only 15 times the net income, which is why the market values Toyota only 15 times higher than HD. At leats that was the numbers a few months ago. With Toyota down 10% from its high tis year it could be different.

I guess buying GM or HD stock in January would have been a been better than Toyota.

171128[/snapback]

[Member55]

Actually.... One NYSE share of Toyota actually represents 2 actual shares of Toyota.

So, if Toyota's stock is at say $84 on the NYSE, it's ACTUAL value is $42 per share.

Of course, most in the media are too stupid to know that and so the story goes...

171044[/snapback]

What's your point?

[ellives]

I believe the whole point of this thread is the ADR's were intentionally set up as the 2-for-1 ratio to artificially make TM's stock price appear to be a higher valuation stock when in fact it's really half the price.

To me the whole discussion is moot. Any company can make their stock price to be anything. GM could double their price by doing a reverse stock split. What does this prove? Fools and their money are soon parted?

What's your point?

171331[/snapback]

[CaddyRich]

Maybe I'm looking at this wrong...but aren't these the same "analysts" who did nothing but bash GM and help drive down the stock price 9 - 12 months ago...GM stock that you were encouraged to dump is now a "buy"??? Sounds like The Street is at it again.

[!!!TED!!!]

This just in:

http://today.reuters.com/news/globalcovera...before_the_bell

GM comes in strong

...The car company posted a larger-than-expected operating profit, although its net quarterly loss widened after writing down costs associated with buyouts for almost a third of its factory work force. (Read story)

Excluding charges, GM posted a profit of $2.03 per share. Analysts, on average, had forecast an operating profit on that basis of 51 cents per share, according to Reuters Estimates.

Total revenues for the second quarter rose to $54.4 billion from $48.5 billion. Revenue from auto sales rose 11 percent to $45.2 billion from $40.4 billion.

and...

http://money.cnn.com/2006/07/26/news/compa...sults/index.htm

NEW YORK (CNNMoney.com) -- General Motors roared past even the most optimistic Wall Street forecasts Wednesday as it reported a large operating profit and made money from its core auto operations for the first time since 2004.

[nyscene911]

I'm not really sure what to think. Wall Street sounds happy but then...

The world's largest automaker posted a second-quarter net loss of $3.2 billion, or $5.62 per share, compared with a loss of $987 million, or $1.75 per share, for the year-ago quarter.

http://today.reuters.com/business/newsarti...usiness-ousiv-1

good or bad results?

[Drew Dowdell]

I'm not really sure what to think.  Wall Street sounds happy but then...

http://today.reuters.com/business/newsarti...usiness-ousiv-1

good or bad results?

171551[/snapback]

good results because the loss was a result of a one time charge. If nothing else changes 3rd Qrt will be net profit.

Remember that the stock market is all speculation based. Wall Street is happy because it looks like GM will be making money in the future.

[nyscene911]

The new question is: with stock >30, what does Kerkorkian do with his? Now that its "profitable"

[Drew Dowdell]

Well he already lost some money from a sale earlier this year... so it's got to go higher before he'll make profit from it.

[jbartley]

Well he already lost some money from a sale earlier this year... so it's got to go higher before he'll make profit from it.

171557[/snapback]

he didn't have to take that loss, he only did it for tax purposes.

greedy bastard.

Looks like GM "might not need Nissan's help"....after all? haha

"Kirk Kerkorian, Jerry York and Carlos Ghosn's grand "Plan" to take over the American corporate icon is all of a sudden looking extremely shaky. Kerkorian, York and Ghosn - the Three Amigos of Greed, Power and Ego - who couched their blatant overthrow attempt aimed at displacing GM CEO Rick Wagoner in touchy-feely, biz-school babble muttering about developing corporate synergies for the global auto industry's future (none of which are readily apparent to anyone looking at the three companies) and other B.S. du jour are all of a sudden on a big fast train to NowhereVille." - Today's Autoextremist: On The Table

[lanky9172]

Actually the share price has no direct corrollation to value of the company. The number of outstanding shares times the value of those shares is the market capitalization.

Ironically Toyota had 30 times the revenue of Harley Davidson, but only 15 times the net income, which is why the market values Toyota only 15 times higher than HD. At leats that was the numbers a few months ago. With Toyota down 10% from its high tis year it could be different.

I guess buying GM or HD stock in January would have been a been better than Toyota.

171128[/snapback]

and so it goes to show that trying to play the stock market is trying to bet on when Keith Richards is going to croak from all the fun stuff he has inhaled over the years...I am happy that GM stock is going up, thrilled actually, and that Toyota's is sinking, but trying to play the market based on one stock is not the best idea. I would have liked to have bought GM stock back in the Spring when I was thinking it would be best...but as I said, trying to play the market with one stock is like buying a house site unseen; you really don't know what you are going to end up with. No crystal balls here...

[samuel]

I would like to pat myself on the back for buying 100 shares when it was at $18 or so, but then again, I already owned another 100 that I bought at $45...

[Member55]

I would like to pat myself on the back for buying 100 shares when it was at $18 or so, but then again, I already owned another 100 that I bought at $45...

172145[/snapback]

I got 100 shares at $29, bu that was before it went down to $18 or so.