GM outlook disappoints after profit beats Street
By Ben Klayman and Deepa Seetharaman
DETROIT (Reuters) - General Motors Co offered investors a disappointing outlook for the upcoming six months in North America, raising questions about the economy's recovery and sending its shares down as much as 3.2 percent.
While the world's largest automaker posted a first-quarter profit that surpassed forecasts, the outlook for its key market fell short of expectations. GM's results echoed those of smaller rival Ford Motor Co, which last week also posted a stronger-than-expected profit, but offered a disappointing forecast.
GM's North American results in the first quarter were also shy of Wall Street's expectations.
"Economic growth may be moderating to some degree," said Josef Schuster, president of iPox Schuster, which owns GM shares. "It's going to hit GM in terms of sales and revenue outlook."
GM executives said the U.S. economy was getting better, but in fits and starts.
"We're clearly seeing some improvement in the economy," Chief Financial Officer Dan Ammann told reporters on Thursday. "It's a modest underlying improvement, but it's patchy and it won't necessarily all go in a straight line."
GM said it expected its core North American results in the second and third quarters to largely match the first quarter due to scheduled downtime at its large truck plants. Citi analyst Itay Michaeli said the outlook implied adjusted earnings in North America in the first nine months of $5.1 billion, well short of the $5.6 billion he was expecting.
FIGHT FOR SALES Continued...