This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Ford, GM Shares Soar on Europe Fixes, Earnings Beats

Stocks in this article: FGM

DETROIT ( TheStreet) -- GM (GM) and Ford (F) shares rose Wednesday, reflecting the strong U.S. auto market and the unveiling of aggressive plans to restructure in Europe, where each company will lose at least $1.5 billion this year.

In mid-afternoon trading, GM shares were trading at $25.40, up $2.12, or nearly 9%. Ford shares were trading at $10.98, up 66 cents, or about $6.5%. For the full year, GM shares are up 21% while Ford shares are flat.

Trading reopened Wednesday after both automakers beat third-quarter analysts' estimates. GM, which reported Wednesday, earned 93 cents a share, excluding items. Analysts surveyed by Thomson Reuters had estimated 60 cents. Ford, which reported on Tuesday, earned 41 cents a share. Analysts had estimated 30 cents.

In Europe, GM is "putting the tools in place to grow our business," Vice Chairman Steve Girsky, who is overseeing Opel's restructuring, said on the company's earnings call. "We're making some progress. Small wins lead to big wins. We've got a plan, the plan relies a lot on GM and the help we get and the idea flow we get and we're just going to keep doing that."

GM said full-year 2012 earnings before interest and taxes in Europe will fall between minus $1.5 billion and minus $1.8 billion. In 2013, results should be "slightly better," GM said. "Break-even EBIT-adjusted results are targeted by mid-decade."

Girsky said inventory has been reduced by 100,000 units since February. On the cost side, fixed costs will decline by about $300 million in 2012, with another $500 million in cuts targeted between 2013 and 2015. The work force will be reduced by 2,600 in 2012, with further unspecified reductions expected.

GM will introduce 23 new vehicles in Europe by 2016. Stepped-up marketing efforts include soccer advertising and a "Love it or Return it" campaign in Germany. So far, of the 25,000 cars that have been sold, only 10 have been returned.

"Opel is not an island in itself, (but) they wouldn't ask for nor get a lot of help from the organization," Girsky said. But GM has been making wholesale management changes. Of the top 18 executives at Opel a year ago, only four or five are left. "We brought in people from the outside (and) we transferred some of our best internal talent to prominent positions in Europe," he said. Already, Opel is gaining share in nine countries and Vauxhall is the fastest-growing retail brand in the U.K., Girsky said.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,805.41 +127.51 0.76%
S&P 500 1,964.58 +13.76 0.71%
NASDAQ 4,483.7150 +30.9230 0.69%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs