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General Motors Stock Up as Recalls Send Profits Down
General Motor shares are up Thursday, even after an 85 percent decline in profits after GM lost $1.3 billion in recall related repairs. Opening trade on Thursday showed GM shares were up 3.3 percent at $35.52. General Motors says its ever stronger core operating results were “more than offset” by expenses related to recent recalls of a combined 3.7 million cars due to faulty ignition switches and steering.
The company’s adjusted EBIT-earnings before interest tax- was in at $500 billion, down from $1.8 billion a year ago because of a $1.3 billion pre-tax recall charge, at 48 cents per share, and $400 million in special items, at 23 cents per share. “The performance of our core operations was very strong this quarter, reflecting the positive response of customers to the new vehicle we are bringing to the market,” said CEO Mary Barra in a statement on the results.
“Our focus remains on creating the world’s best vehicles with the highest levels of safety, quality and customer service, while aggressively addressing our business opportunities and challenges globally.” Barra’s takeover as the Head of General Motors has given high hopes that she could turn GM around after the 2007 financial crisis.
According to Forbes Magazine’s Joann Muller, “A middle aged staffer at General Motors felt goose bumps when she saw Mary Barra enter a room for the first time after she was named General Motors’ new chief executive.
Image Credit: motortrends.comGeneral Motors Stock Up as Recalls Send Profits Down by Jaan