General Motors posted stronger-than-expected quarterly profit yesterday as the US car firm kept a tight grip on costs in its North American and European businesses.
GM shares rose 3.6 per cent to $31.27, near their initial public offering debut of $33 in the fall of 2010, and hit the highest point since July 2011.
The increase is welcome news for GM’s largest shareholder, the US Treasury, which acquired its stake after a taxpayer-funded bailout. The Treasury, which says it will sell its remaining position over the next year, gains almost $250 million for every $1 increase in GM’s price.
The company expects to break even by mid-decade in Europe, where it has reported 13 straight years of losses, said GM chief financial officer Dan Ammann.
RBC Capital Markets analyst Joseph Spak welcomed the results, pointing to the company's ability to cut costs. "Better-than-expected results [in Europe] will be well received, giving investors confidence that progress is being made and break even by mid-decade is possible," he said in a research note.
– Reuters
