Stuck in reverse.
Shares of General Motors were in the red after posting a 15% decline in Q3 profits and provided investors with a disappointing forecast. While net income fell to $1.03 per share, it came in above the average analyst estimate of $0.96 and revenue of $34.1 billion was in line with expectations.
CEO Dan Akerson said the company was not performing well enough, commenting, “GM delivered a solid quarter…but solid isn’t good enough, even in a tough global economy.”
The real disappointment for investors and analysts was management’s pessimistic outlook for the coming quarters. GM no longer expects to reach its goal of breaking even in Europe this year as economic turmoil has hampered the company’s rebound. CFO Daniel Ammann said the recipe for a turnaround for Europe would be the same as that of the U.S. – better products, better prices and reduced costs – though it should be noted that there will be no government money to help the automaker in Europe.
In South America, Akerson called results “unacceptable,” saying it will make additional cuts beyond the job cuts made in Brazil to help offset anticipated weakness in Q4.
General Motors (GM : NYSE : US$22.31), Net Change: -2.73, % Change: -10.90%, Volume: 32,731,045
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