According to Reuters, General Motors Company (GM) has declared that its European unit Opel remains positive that sales growth in 2014 will be sufficient so that the company won’t need to make further cost cuts. The market reacted positively to the news and the company’s share price rose as much as 1.4%.
As per the company, Opel will achieve profitability by 2016. However, 2014 can prove challenging as the unit is expected to incur restructuring costs for ending vehicle production at its factory in Bochum, Germany.
To keep Opel on track to reach profitability, General Motors has implemented a 4 billion Euro ($5.5 billion) investment plan. General Motors remains optimistic about its European division as in the quarter ended Sep 30, 2013, the GM Europe (GME) segment posted a pretax loss of $214 million, versus the $487 million loss in the corresponding prior year quarter. This shows improvements in operations.
General Motors recorded adjusted earnings of $1.6 billion or 96 cents per share in the third quarter of 2013, beating the Zacks Consensus Estimate of 91 cents. On the other hand, the company had generated earnings of $1.6 billion or 93 cents per share in the prior year quarter.
Including a net loss of $0.9 billion or 51 cents per share from special items in the reported quarter, net income (on a reported basis) amounted to $0.7 billion or 45 cents, compared with $1.5 billion or 89 cents a share in the year-ago quarter.
Revenues in the quarter grew 3.7% year over year to $39 billion, beating the Zacks Consensus Estimate of $38.7 billion.
General Motors is one of the largest automobile producers in the world along with Ford Motor Co. (F), Honda Motor Co., Ltd. (HMC) and Toyota Motor Corporation (TM). Currently, General Motors has a Zacks Rank #3 (Hold).
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