General Motors Co.’s share price down, lowers its 2014 forecast, but CEO promises to regain trust in the company

The largest auto manufacturer in the U.S. – General Motors Co. made an official statement, announcing its results for the first quarter of 2014. The performance of the company surpassed the analysts expectations, but was strongly influenced by the recent recalls the company has been dealing with. Still, the results showed that General Motors customers remain willing to buy and even pay a higher price for the companys new vehicles.

General Motors Co. revealed that its retail sales all over the world increased by 2.3% and reached 2.42 million vehicles, due mainly to increasing sales on the European and Asian market. The first-quarter adjusted profit was 29 cents a share, surpassing the forecasts of the analysts by 25 cents a share.

The company said that its net income decreased by 82%, reaching $213 million in comparison with $1.18 billion posted in the first quarter of 2013 due to the ignition switch problem and subsequent recalls. General Motors Co. also posted a net loss of 400 million dollars on special items mainly due to currency fluctuations in Venezuela.

Mr. Chuck Stevens, who is the Chief Financial Officer of General Motors Co., said on a conference call, which was cited by Bloomberg: “We performed better than expected in the first quarter so we’ll have to trim some of the expectations Q2 through Q4.”

In fact, the company was trying to narrow the expectations for 2014 even before the vehicle withdrawals, saying it projects to improve its performance “modestly”.

Encouraged by the loyalty of the companys customers, the Chief Executive Officer of General Motors – Ms. Mary Barra – promised that she will do everything in her strength in order to bring back the “full trust” of both clients and regulators.

Ms. Barra shared her pride on the fact that after all the recent problems it went through, GM managed to remain profitable. As reported by the Financial Times, the companys CEO said: “The overall key objectives for this recall are to repair the cars as quickly as we can and win back the full trust and confidence of our customers, our regulators and other stakeholders. That’s why GM’s goal is to have the best product safety practices in the industry. Although it is early, it appears we have not experienced any meaningful impact on sales.”

General Motors Co. was 0.64% down to close at 34.17 dollars per share yesterday, marking a one-year change of +12.22%. According to the information published on CNN Money, the 18 analysts offering 12-month price forecasts for General Motors Co. have a median target of 45.00, with a high estimate of 50.00 and a low estimate of 32.00. The median estimate represents a +31.69% increase from the last price of 34.17.