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General Motors Company (NYSE:GM) Disappoints As Europe And South America Reverse

General Motors Company (NYSE:GM) failed to achieve its expectations after the company experienced losses in Europe and South America, despite performing better in the States.

The company’s quarterly net income amounted to $945 million. The low earnings and losses led to the decision to write-off $337 million which would oversee the termination of its manufacturing line in Russia. An Additional $150 million was allocated to cater for the company’s faulty ignition switch lawsuit.

The negative news has resulted in non-desirable share performance in the stock market. Shares dropped in value by about 5% following the announcements that were made by the company’s Chief executive officer, Mary Barra during a press conference. Ms. Bara also said that the company was strategizing on its 2015 and 2016 operating calendar with plans to improve its performance as well as booting its profits.

Sales in North America were boosted by the region’s increased demand for pickup trucks and Sports Utility Vehicles. That is part of why the company plans on taking the North American EBIT margin strategy that is expected to grow by 10% within the next year. This means that the company has established the demand for pickups and light trucks a major focus point to improve profits.

The sales for SUVs and pickup trucks went in 2014, particularly with a lot of support from the decreasing oil prices. Despite the improving performance, Ms. Bara warned investors that the phenomenon was volatile, and there was a probability that it would not last long. The oil situation had previously exhibited instability, and that had greatly affected the economy.

GM announced that the company would terminate production in Russia because it was too costly. Most of the materials had to be imported, and the market was particularly weak. The ignition switch lawsuit is one of the company’s biggest problems. Accidents involving the company’s cars associated with the problem led to demands for hefty sums from the company.

Despite the many issues arising, General Motors Company (NYSE:GM) plans on making improvements that will contribute to progressive profits in the future.

Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email ([email protected]) or his Google+ page (https://plus.google.com/103338576216002376250).

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