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Market Update

Earnings on Tap: General Motors

The auto giant's earnings are likely to grow rapidly as domestic vehicle sales bounce back from the 2009 lows.


Auto giant  General Motors (GM) will announce its latest results Thursday morning before the markets open. The consensus estimate is calling for earnings of $0.50 per share compared with $0.28 per share reported in the year-ago quarter.

During the third quarter, the company's net income slipped to $1.5 billion, or $0.89 per diluted share. Revenues, however, rose to $37.6 billion driven by strong growth in domestic car sales.

Chief executive Dan Akerson said the carmaker had a "solid quarter" and that the fourth-quarter results are likely to be "similar or slightly better" than the corresponding period a year ago.

Earlier this month, automakers reported strong new light-vehicle sales for January, with GM posting an overall January year-over-year volume increase of 15.9% and an impressive 23.7% increase in the retail channel. Morningstar analyst David Whiston expects 2013 to be a good year for GM, especially since the U.S. government is exiting the stock. Whiston believes the company's earnings will grow rapidly as U.S. vehicle sales bounce back from the 2009 lows.

The stock is up 13% over the trailing three months, but it still lags much behind Whiston's fair value estimate for the company.

Gazala Parveen does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.