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Here's Why General Motors (GM) Stock is Sluggish Today
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On Tuesday, shares of automaker giant General Motors Co. (GM - Free Report) are acting sluggish, down around 3.8% in midday trading after the company reported its fiscal 2016 third quarter financial results. Despite impressive earnings, investors fear a slowdown in U.S. vehicle sales, currency instability in Europe, and uncertainly about China, in turn negatively affecting GM stock.
GM posted adjusted earnings of $1.72 per share, soaring past the Zacks Consensus Estimate of $1.44 per share and marking a third-quarter record for the company. On a reported basis, net income more than doubled, coming in at a record $2.77 billion.
Revenues for the quarter were $42.8 billion, beating our consensus estimate of $40.09 billion and gaining 10.3% year-over-year.
Looking ahead, GM expects full-year results to be on the “high end” of its previous forecast of $5.50-$6.00 per share, significantly higher than fiscal 2015's full-year earnings of $5.02 per share.
However, it looks like its Europe business will prove difficult for GM. The company reported a third-quarter loss in Europe of about $100 million. CFO Chuck Stevens told reports that “achieving break-even results for Europe this year will be ‘very, very challenging,’” according to Reuters. When the value of the British pound drops, GM is thusly impacted, as it manufactures many vehicles in the U.K. that are sold in Germany, Spain, and other countries that use the euro.
GM is "prepared to take whatever action is necessary" to achieve its goal of returning European operations to profitability, Stevens said, but offered no specifics, according to CNBC.
GM is a Zacks Rank #3 (Hold), and shares of the company are down over 3% year-to-date.
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Here's Why General Motors (GM) Stock is Sluggish Today
On Tuesday, shares of automaker giant General Motors Co. (GM - Free Report) are acting sluggish, down around 3.8% in midday trading after the company reported its fiscal 2016 third quarter financial results. Despite impressive earnings, investors fear a slowdown in U.S. vehicle sales, currency instability in Europe, and uncertainly about China, in turn negatively affecting GM stock.
GM posted adjusted earnings of $1.72 per share, soaring past the Zacks Consensus Estimate of $1.44 per share and marking a third-quarter record for the company. On a reported basis, net income more than doubled, coming in at a record $2.77 billion.
Revenues for the quarter were $42.8 billion, beating our consensus estimate of $40.09 billion and gaining 10.3% year-over-year.
GENERAL MOTORS Price, Consensus and EPS Surprise
GENERAL MOTORS Price, Consensus and EPS Surprise | GENERAL MOTORS Quote
Looking ahead, GM expects full-year results to be on the “high end” of its previous forecast of $5.50-$6.00 per share, significantly higher than fiscal 2015's full-year earnings of $5.02 per share.
However, it looks like its Europe business will prove difficult for GM. The company reported a third-quarter loss in Europe of about $100 million. CFO Chuck Stevens told reports that “achieving break-even results for Europe this year will be ‘very, very challenging,’” according to Reuters. When the value of the British pound drops, GM is thusly impacted, as it manufactures many vehicles in the U.K. that are sold in Germany, Spain, and other countries that use the euro.
GM is "prepared to take whatever action is necessary" to achieve its goal of returning European operations to profitability, Stevens said, but offered no specifics, according to CNBC.
GM is a Zacks Rank #3 (Hold), and shares of the company are down over 3% year-to-date.
Stocks that Aren't in the News…Yet
You are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. Many of these companies are almost unheard of by the general public and just starting to get noticed by Wall Street. They have been pinpointed by the Zacks system that nearly tripled the market from 1988 through 2015, with a stellar average gain of +26% per year. See these high-potential stocks now >>