It Depends on Whom You Ask

General Motors posted Q1 profits today. You might be confused about the results if you saw a sampling of the headlines for stories about the earnings report.

headlines2

Was this report positive or negative? Some of these headlines imply that the General Motors’ earning report indicated stellar performance – “best North American first quarter,” “profit surge,” “push GMs profit eight times above year ago.” Others signal alarm: “profit disappoints,” “comeback hits a speedbump,” “tough earnings miss.”  Only one – “General Motors 1Q profit rises 8 times above a year ago, but company misses analyst estimates” – provides the good and the bad news in the report.

Analysts had expected GM to earn $0.96 a share, but actually posted profit of $2.18 billion, or $0.56 per share. Consequently, stocks have been falling since the earnings report was released. As of this moment, they are down 3.77%.

Sales of trucks and SUVs are up in North America, in part because of lower gas prices. In the North American market, GM posted a record profit of $218 billion. Sales in China are also strong. In other parts of the world, GM experienced losses due to reduced demand and currency exchange rates. For example, in Q1, they took a $428 million charge related to exiting the Russian market, a decision made because of the economic and political uncertainty in the region. Sales in South America and Europe were down, and this was exacerbated by exchange rates unfavorable to GM.

Additionally, GM set aside an additional $150 million for the ignition switch compensation fund and started an ambitious stock buyback program to deter a group of investors from initiating a proxy fight.

As noted by the Wall Street Journal, most losses were caused by factors outside of GM’s control. Still, that is not reassuring to the investors who are selling GM stock today.

Read the original articles at the following links:

Photo credit: “Stock Market Chart” courtesy of cooldesign at FreeDigitalPhotos.net

Advertisements

Published by

aimeedars

My husband likes to tease me by telling me I must be an alien. When I worked as a faculty member in a Business school, colleagues from other disciplines liked to say, “She’s not one of them.” I choose to take these comments as compliments and attribute them to the contradictory characteristics that define me. Highly analytical and results-oriented, I also approach interactions and challenges with empathy, curiosity, and wonder. I see myriad possibilities and delight at considering how to implement them. Since they are based on a solid theoretical foundation, most of them are reasonable and effective. In brainstorming conversations, others often respond to me by saying, “I didn’t think of that.” At the same time, I enjoy learning from everyone I meet, and I want everyone leaving a conversation with me to feel like they have been heard with compassion. My hobbies include knitting, making jewelry, reading, and hanging out with my husband and dogs. I am a long-time vegan committed to social justice and animal rights.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s