General Motors Company
) recently announced the signing of new multi-year project
services and software contracts with
). This new move will enhance General Motors' growth in IT
transformation and will support the delivery of global services
and products to its business partners, and reduce costs involved
in the ongoing IT operations.
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General Motors plans to hire up to 3,000 Hewlett-Packard
employees, who are already engaged in the company's projects, to
further improve the software deployed by the company.
General Motors primarily outsources most of its IT work. But the
company now plans to reverse the situation and bring innovation
and development in its IT segment. The company plans to hire
workers devoted to innovations rather than operations at four new
technology centers in Austin, Texas, and Warren and Michigan,
over the next three to five years.
General Motors, in the second quarter of 2012, registered a 41%
decline in its profit to $1.49 billion or 90 cents per share from
$2.52 billion or $1.54 in the corresponding quarter of 2011.
Nevertheless, the earnings per share exceeded the Zacks Consensus
Estimate by 15 cents.
Total revenues fell 4.5% year over year to $37.60 billion in the
quarter, missing the Zacks Consensus Estimate of $37.98 billion.
The decline in the profit and revenues was attributable to
strengthening of the U.S. dollar against most of the major
currencies as well as weak macroeconomic conditions globally,
especially in Europe and South America.
Detroit, Michigan-based General Motors is the largest automobile
manufacturer in the world. However, like its competitor
Ford Motor Co.
), the company's significant exposure to troubled Europe has
adversely affected its operations in the continent.
Currently, General Motors retains a Zacks #3 Rank, which
translates into a short-term Hold rating. We have a long-term
Neutral recommendation on the stock.