ANALYSTS REACT: 'Worse on the outside than on the inside'
A roundup of expert analyses of General Motors' fourth-quarter financial report:
"Like a slightly used car with significant cosmetic damage but a working powertrain, GM posted a quarter that looks worse on the outside than on the inside."
-- Brian Johnson, Barclays Capital
“This business has been able to track to margin levels above 9 percent through thick and thin over the last several years. In many ways, China had been an answered question for GM but we believe that GM will have to face increased scrutiny about the outlook for this business unit.”
-- Matt Stover, an analyst with Guggenheim Securities
"GM sales disappointing but not thesis changing – take advantage of sell-off. While GM sales of -6% year-to-year were shy of Street expectations calling for +1.5% year-to-year growth, we wouldn't read too much into one month of sales. Further, we believe GM did a better job holding the line on incentive spending in the month which means more profitable sales."
-– Joseph Spak of RBC Capital Markets
"Only good news comes from stronger Q4 cash flow and lower U.S. pension underfunding. Stock likely to come under modest pressure this morning, though we don't view this as a story-changing quarter as weakness is isolated to regions where GM is aggressively restructuring throughout 2014."
-- Analyst Itay Michaeli of Citigroup Global Markets
"Overall, we would expect a bit more weakness in GM's shares given the soft headline. The key issue is the outlook, which remains the same as provided in Detroit. On the company's call today, we expect that investors will attempt to gain additional insight into the drivers of performance beyond 2014 (i.e. GM still believes that they have significant upside)."
-- Rod Lache, Deutsche Bank analyst
“GM’s 2014 guidance for flat adjusted profit margins vs. 2013 adjusted profit margins meant that there was a lot of hope that GM would end the year on a strong note -- instead it had a big earnings miss, so there’s disappointment there. Investors are probably extrapolating what that means for this year.”
-- Christian Mayes, an analyst with Edward Jones
"Consensus (analyst earnings forecasts) is likely to keep falling for 2014 and 2015. We believe expectations may be reaching a bottom here."
-- Adam Jonas, a Morgan Stanley analyst
“At this point, any kind of improvement in Europe is a win just because it’s so bad there."
-- David Whiston, an analyst with Morningstar Inc.
Bloomberg contributed to this report.
You can reach Sean Gagnier at email@example.com.