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GM shares hurt as investors question whether automaker can deal with slowing US market

  • GM posted its most profitable quarter ever, but the company's stock barely budged.
  • Shares have been hurt by investors questioning GM's ability to deal with a slowing market.
  • There have been questions about whether GM would stop production of some sedans.

General Motors may be cranking out the type of quarterly earnings it could only imagine just a few years ago, but investors are acting like the automaker is stuck in neutral.

GM posted its second most profitable quarter ever, earning $2.4 billion and beating earnings estimates by a wide margin.

But the stock failed to pop as questions grow over whether GM will be able to adjust to a slowing market in the U.S. — specifically, whether the automaker will ditch several car models and retool some of its plants to build crossovers and SUVs.

"We are always going to be very, very focused on aligning supply and demand," GM's chief financial officer, Chuck Stevens, said on CNBC's "Squawk Box." "As we've seen the shift from passenger cars to crossovers, we've taken very proactive action to reduce our production of passenger cars."

Stevens' comments follow reports General Motors is considering killing production of some slower-selling cars, such as the Chevy Sonic, which is built at the automaker's Orion plant in Michigan. This year, sales of the Sonic in the U.S. are down 36.5 percent. Overall, GM's car sales have dropped 18.7 percent in 2017, while crossover sales are up 18.2 percent, according to automotive research firm Autodata.

Still, on the company's earnings call, GM CEO Mary Barra downplayed talk of the automaker dumping sedans to build more SUVs and crossovers.

"As we talk we also have very strong SUVs and crossovers that we are rolling out first half of this year and we will continue in the second half so I think we are going to be well-positioned to capitalize on that growth and then well-positioned from a car perspective," said Barra.

General Motors' ability to drive profits as the U.S. auto market plateaus or gradually slows down is one reason why shares of the automaker have lagged the market overall. In the last year, shares of GM are up nearly 13 percent, slightly below the return of 14 percent for the S&P 500.