General Motors Co. (
) shares are moving higher Tuesday afternoon heading into its
third-quarter earnings report, expected out before the market opens
The Street is looking for GM to report earnings of 96 cents per
share on revenue of $36.66 billion. GM posted earnings of $1.54
reported last quarter, and $1.20 for the same period last year.
Through the quarter, shares moved 33.5 percent lower to $20.18.
Shares are 23.5 percent better since the end of the quarter, but 32
percent lower in 2011. GM has traded in a range of $19.05 to $39.48
over the last 52-week time frame.
Last quarter, GM reported a book value of $20.47 per share and cash
of $20.98 per share. From a valuation standpoint, GM is going for
about 5.8x next years earnings, compared with 7x for Ford Motor (
) and 14.3x for Toyota (
Data from Bloomberg has 16 analysts with a Buy on the stock, five
at Hold, and none suggesting to Sell. The Street price target
average is $37.50, with a low of $24 and high of $43.
U.S. auto sales through the quarter: 7.6 percent risen in July, 18
percent in August, and 20 percent in September. Investors might
want to heed some caution, however, as October sales saw just a 1.7
On the other hand, reports Tuesday suggest CEO Dan Akerson is
aiming to improve GM's margins significantly through cost cuts,
amid some of the best financial reporting GM has produced in over
20 years. With 6 percent margins, one analyst commented, GM leads
only Toyota, Renault SA and PSA Peugeot Citroen. Peers Ford and
Volkswagen boast margins at 7 percent or better.
One way GM plans to do this is reducing the number of vehicle
architectures. From 30 designs right now, GM would like that to
move closer to 14 by 2018 through the building of more high-volume
vehicles with the same frame. Also, GM hopes to reduce the number
of engines used in its vehicles. It cut that number from 20 to 16
in 2009, and would like to hit just 10 by 2018.