General Motors stock rise in 3rd quarter surprises industry
By Tom Krisher ,APDETROIT -- Surprise! The top-performing stock among automakers in the U.S. this quarter is General Motors.
September 30, 2012, 12:05 am TWN
The company, which endured management upheaval during the quarter and announced that it would lose substantial cash in Europe, saw its shares rise almost 18 percent from July through late September. The gain was the best since the first quarter of this year, when the stock climbed about 23 percent. GM posted strong profits in that period.
GM stock has outperformed all other major automakers in the U.S. including rival Ford Motor Co., which saw its shares rise only 5.5 percent. Only Nissan Motor Co.'s U.S. shares came anywhere close to GM's stock appreciation. They were up almost 11 percent.
General Motors Co.'s gains for the quarter surprised industry watchers, given publicity about management changes and the continued sales slump in Europe that has hit nearly every major automaker.
During the quarter, GM ousted its marketing chief and the head of European operations. It also lost several other key executives including its top electric-car engineer and head designer in Europe.
Investors now realize that most of the departures signal that GM is making necessary changes. That's better than sweeping management problems under the rug like it did in the past, said Bill Selesky, an industry analyst for Argus Research. The changes, he said, have set GM apart from its peers this quarter.
“I think people are now looking at the company and saying they're more proactive,” Selesky said. “They're not the same company my father used to know.”
For the quarter, GM shares gained US$3.48, rising from US$19.70 on July 2 to close at US$23.18 on Thursday. The stock pulled back a little in morning trading Friday, the last trading day of the quarter, falling 1.6 percent to US$22.81.
Shares of Japanese rivals Toyota Motor Corp. and Honda Motor Co. each lost ground during the quarter, with Toyota down slightly and Honda off almost 8 percent.
GM made US$2.5 billion through the first half of the year. But it's predicting lower profits in the second half as losses continue in Europe.