DETROIT (Bloomberg) -- At General Motors Co.'s first annual meeting since going public again, Dan Akerson talked up profits that old GM hadn't seen in a decade.
What he couldn't do is take a victory lap.
GM is trading about 13 percent below its $33 price when CEO Akerson led the initial public offering in November. GM shares closed at $28.78 today on the New York Stock Exchange, up 0.8 percent.
During the meeting this morning, Akerson told shareholders they need to be patient with GM's sagging share price, which he said has been weighed down by rising gas prices, weak job growth and continued economic uncertainty.
He noted that GM has strung together five straight profitable quarters through the first quarter, and that GM's stock performance is in line with the rest of the industry.
"No one said this was going to be a layup," he said. "There's a lot of work to do over the next couple of years, not only at General Motors but throughout the industry."
Akerson has yet to show investors that GM has the operating efficiency or future product plan to match the profits of Ford Motor Co., which made 36 percent more money in the first quarter, excluding one-time items.
Excitement around the IPO led the automaker and the U.S. Treasury, its biggest investor, to expand the sale to $15.8 billion in common equity plus preferred stock.
Since then, GM has tumbled and investors are waiting to see a plan to match Ford's profit or even buy out the government's stake, said Peter Nesvold, a Jefferies & Co. analyst.
"It's surprising," Nesvold said of the sinking stock price. "They kept the company together and brought it a long way, but investors haven't really bought into the story that it's a new GM."
GM executives have discussed buying shares from the Treasury, people familiar with the matter have said. GM may earn adjusted net income of $7.72 billion this year, the average of 10 analysts' estimates compiled by Bloomberg. Profit on an adjusted basis may rise to $9.55 billion in 2012, according to 10 estimates.
GM may not be able to generate much investor interest until the economic recovery gains more traction or until the company puts up a few more quarters of solid numbers, said David Whiston, an analyst with Morningstar Inc. in Chicago.
In the first quarter, GM made $1.88 billion not including one-time gains for asset sales. The government owns 33 percent of GM and would like to sell some of its stock this year, said three people familiar with the matter.
The government wants to sell for at least the $33 initial public offering price and needs a catalyst to get it there, the people said.
Some investors see the government's continued stake in the company as an overhang on the shares.
Akerson said the board would make no decision to buy back shares -- which could boost the stock price -- until the government decides its plans for its stake. Sources told Reuters last month that the Treasury Department plans to hold its shares until at least August.
U.S. automakers have been the nation's first major industry to show evidence that the economy may be slowing again after a tepid recovery from a brutal recession.
GM's U.S. auto sales in May fell short of analysts' expectations, as higher prices and lower incentives by the company and many of its larger rivals led consumers to put off purchases in the face of a weakening economy.
Industry-wide, May sales fell 3.7 percent from last year to an annualized rate of 11.8 million. That fell far short of the 12.6 million expected by a Reuters poll of economists and was the lowest rate since September 2010.
"No one is doing a victory lap," Akerson said, flanked by two new GM cars -- the Buick Verano and Chevrolet Sonic. "We have a lot to do."
The company aims to increase manufacturing of its high-end Cadillac vehicles overseas in the next 18 to 24 months to strengthen that luxury brand outside the United States, he said, without providing further details.
GM currently builds a small number of Cadillacs in a joint venture in China and sells it in European and Asian markets.
"The primary driver of any further balance sheet activities will, I think, in the near term be driven by the government's decision of when or when they will not exit the company," Akerson said.
GM's shortcomings are highlighted in comparison to Ford Motor Co., where CEO Alan Mulally kept his management team together and avoided bankruptcy. GM earns less in North America and Europe than Ford, which also has a large and profitable credit arm that is expected to deliver $2 billion in cash dividends to the parent company this year, Nesvold said.
While Ford's shares have slipped more since GM's IPO, its stock still trades at a higher valuation. GM's stock trades at 5.5 times its earnings while Ford trades at 6.9 times earnings, according to Bloomberg data.
Ford's market capitalization is $52.8 billion and GM's is $44.6 billion. Ford is making more money in North America, even though GM has higher sales volumes and a cost advantage. In the first quarter, Ford made $1.8 billion in pretax operating profit in its home continent, compared with $1.3 billion for GM.
One problem for GM is pricing. In the first quarter, GM led the industry in spending on discounts, which reduced profit by $300 million. Meanwhile, Ford raised prices on its cars, which added $700 million in pretax profit.
"That's a $1 billion difference," Whiston said. "I'll be watching to see if GM's pricing gets better in the second quarter."
After incentives, the Ford Fusion sells for $22,276, which is $1,342 more than the competing Chevrolet Malibu, and the Ford F-Series pickups sell for an average price of $30,898, which is $1,947 more than a Chevy Silverado, according to Edmunds.com, a consumer-research Web site.
In Europe, GM broke even in the first quarter, excluding a goodwill impairment charge, while Ford made $293 million in operating profit in the market.
Even in South America, where GM is the market leader, Ford made more money. Ford earned $210 million, more than double GM's $100 million in first-quarter pretax profit there. GM's 20 percent of the market more than doubles Ford's 9.4 percent, according to researcher IHS Automotive.
GM's other disadvantage is in auto finance. Ford Credit earned $713 million in the first quarter compared with GM Financial's $130 million.
GM is rapidly expanding the operation and later this year will move into wholesale lending, which is extended credit to dealers so they can buy inventory, GM Financial CEO Dan Berce said in a June 1 interview.
The in-house lending unit would also consider starting an insurance unit to sell products to GM's car buyers, he said. The company may also make acquisitions to expand lending operations overseas, Berce said.
Improvements in the global economy that boost consumers' confidence and willingness to spend on durable goods may help GM improve its profit and stock price, said Kirk Ludtke, senior vice president of CRT Capital Group LLC in Stamford, Conn.
"GM's numbers have been underwhelming, but GM is a cheaper stock than Ford," he said. "If the economy comes back, the stock could really take off."
Bloomberg, Reuters, and Mike Colias contributed to this report.