×

GM Posts Big 2Q Earnings, but Can't Get Any Respect

Gm Building
Getty Images
Gm Building

You have to wonder what's going through the minds of executives at General Motors.

After posting far better than expected earnings in the second quarter, and having the company in its best position in years investors are shrugging their shoulders and saying, "so what?"

Today, GM beat the street earning $1.54 a share vs. $120 estimate. Revenue was better than consensus $39.4 billion vs. the street estimate of $36.73 billion. And for the first time in a long time GM is profitable in all regions of the world. It is not only the best quarter GM has posted since coming out of bankruptcy, but also for the company overall in years.

To quote GM CFO Dan Ammann, "We had a significant increase in global market share. We have been able to get significant improvements in price, much lower incentives and that price/ incentive and share combination is really what has driven the result this quarter."

Still, GM's not getting much respect from investors. The stock languishes around $27 a share, well below its IPO price of $33. Yes, the overall market stall has pulled all stocks down, but there's a sentiment issue weighing on GM. Some investors are still wondering if GM can sustain success. When I bring this up to people on Wall Street they shake their head and say at some point people will wake up to the fact this is a different GM.

Against this backdrop, GM executives feel they have their business lined up to succeed long term. The product portfolio, after going through a dip, is moving towards being more complete. The European operation, a long time troubling and money losing business, is finally back in the black. And with auto liquidity standing at $39 billion, GM has more financial flexibility than in the past.

There are many who are hesitant to invest in GM, or buy into its turnaround until the US government sells its remaining stake. Is that the only reason GM shares are languishing? No. Concerns about the broader economy are also a factor. But, get beyond both of those, and you have to wonder when investors will give GM credit for posting solid results.

Click on Ticker to Track Corporate News:

- General Motors

- Ford Motor

- Toyota Motor

- Nissan

- Honda Motor

___________________________ Questions? Comments?BehindTheWheel@cnbc.comand Follow me on Twitter @LeBeauCarNews