DETROIT- a tripling of profits by General Motors Co has been marred by incentives to raise the sale of cars, raise doubts on the ability of the car manufacturer to maintain the pace since the emergence of the bankruptcy.
Profit for the first quarter of GM topped expectations Thursday, driven by a recovery in the US market on the back of strong demand for more fuel-efficient cars fuel as the Chevrolet Cruze.
Analysts, concerns that GM was unable to match rival Ford Motor Co ability to boost volumes and prices, and the shares of GM however, fell as much as 4.7%.
Even though sales rose 15 percent the automaker U.S. to 36.2 billion against Wall Street estimates for 35.6 billion, analysts said the increase was tarnished by the aggressive incentives early in the quarter.
"It's great that they beat a consensus," analyst Morningstar David Whiston says, "but it is disturbing to see no way to get... any help pricing." It is quite a contrast of Ford, which gets the volume and price improvements. GM only get help from the volume now. ?
It was the first full quarter since GM initial public stock offering last November. The company filed bankruptcy in 2009, after the U.S. housing crisis and a surge in prices of gasoline, the previous year which caused consumers to walk away from its high-profit trucks.
GM emerged from bankruptcy in 40 days later with a bailout of $ 52 billion of taxpayer-funded, and the Government of the United States still owns 32 percent of the shares.
Prices for cars and trucks of GM fell in North America and remained flat in its European and international operations, which consist mainly of more large automotive market sales GM, China. Prices rose in South America.
Operating profit adjusted GM international operations fell to one third of the previous year.
Chief Financial Officer Dan Ammann said that GM has recently announced an increase in prices on most of its range of vehicles which entered into force, earlier this week. Continuous price increases can come as the year goes.
"From our point of view, it is a quarter solid." It is good progress. It establishes a good basis for the rest of the year, "said Ammann.
But GM vehicle price gains were lower that those of Ford, analysts said.
"Interesting to" Note that prices of GM did step surprise on the upside as Ford made, analyst of J.P. Morgan Himanshu Patel said in a research note, referring to the first quarter. "" "". "March of GM incentive April decline was not as steep as Ford, suggesting that Ford has benefited more than GM."
The GM operating margin first quarter in North America was just below 6%, compared to 10.3% at Ford.
GM shares decreased by 2.2% to $32.32 Thursday afternoon after dropping as low as $31.50. Shares of GM began to fall last at $33. Shares of Ford increased 0.7% to $15.25.
Analysts have said that many investors is standing on the sidelines, waiting for the Government of the United States to divest its stake in GM. This could be reflected in the stock of GM, which has average daily trading volume approximately one-fifth of the Ford.
GM said it expects that the net profit adjusted exercise before interest and taxes to show "strong improvement" of 2010 was helped by the best price and reduce fixed costs in North America.
The results of GM were those of Ford, which last week posted its best profit in the first quarter in 13 years as of the higher prices for vehicles repainted offset pressure of fortification of the products and the price of oil.
Strong benefits to Ford and GM in the past year are supposed to be an important factor in the negotiations to come up with the United Auto Workers Union. The two companies are in much better financial position that the last time interviews were held in 2007.
However, GM Director General Daniel Akerson said that the UAW understands the structure of the costs of GM must remain at the same level as his rivals, including Japanese manufacturers with plants us and earnings impact of the talks would be "for the worst"déclaréneutre. ?
PRODUCTS COSTS AMOUNTING
GM will have an "intense focus" on the conduct of audit fees, Akerson said analysts on a conference call.
"We are currently facing increased costs of raw materials, we need to offset by a reduction in costs in other areas, the performance of the supplier and the price increase," he said.
However, GM heavily criticized by Wall Street for its encouragement U.S. noble in January and February which were then composed in subsequent months.
Ammann said GM incentives U.S. run currently slightly below the average of the industry and they will remain there until the end of 2011.
Force in China, GM sales in its market and more North American Home increases. April GM U.S. sales increased 26% and it takes the first place, she lost to Ford the prior month.
Income net of GM in the first rose quarter 3.2 billion dollars, or $1.77 a share, compared with $ 900 million, or 55 cents per share, in the previous year quarter.
Excluding these items not recurring that the sales of shares in the financial parts maker Delphi and Ally, he earned 95 cents per share. It was better than analysts surveyed by Thomson Reuters I/B/E/S of 4 cents had expected.
Ammann said that GM is put in place well take advantage of the increase in the price of gasoline with a diversified portfolio much more that three years ago, when gas prices topped last $4 per gallon.
TRUCK PRODUCTION MAY FALL.
However, Amman said that GM could reduce the production of truck if this recent trend towards smaller, more fuel-efficient cars fuel continues. It is a concern of analysts because big SUVs and trucks are more profitable for the automakers.
Posted GM North American operations, adjusted in the quarter before interest and taxes of $ 1.3 billion, or $ 100 million last year. He expects North American results to improve on average for the rest of the year.
GM European unit broke even on an adjusted earnings before interest and taxes of base and target of break-even before the burden of restructuring for the entire year.
Liquidity of the motor vehicle manufacturer at the end of the quarter increased $ 36.5 billion after the sale of the Delphi and alloy stakes.
Ammann said GM has achieved its goal of a "fortress of balance at the moment" and the company is satisfied with his position of debt of 5 billion, unchanged since the last quarter.
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