GM (GM), Ford (F) and the Struggle Ahead

The nation’s prodigal son, General Motors Co. (NYSE:GM), is finally poised to return to annual profitability after slogging through years of losses and doubts as to whether it could even survive.

With plenty of momentum on the sales side and three straight quarters of making money under its timing belt, GM (GM) is slated to post its fourth-quarter and full-year results on Thursday.

Analysts polled by FactSet Research are looking for earnings, on average, of 49 cents a share on sales of $34.3 billion. For the year, Wall Street sees a profit of $5.2 billion, which would be GM’s first annual profit since 2004.

Citigroup (NYSE:C) analyst Itay Michaeli reiterated his buy rating on the stock this week ahead of the earnings, saying that as long as GM at least matches estimates and offers an upbeat look ahead, the buyers will come.

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“GM shares have been range-bound since Ford’s Q4 miss, as investors appear to have braced for a choppy quarter,” he said. “We do not believe GM needs to deliver a Q4 ‘beat’ for the shares to move higher.”

Rival Ford Motor Co. (NYSE:F) saw its shares fall more than 13% last month after the company reported an unexpected loss in Europe as well as a steep drop in fourth-quarter profit. The stock is still up 28% in the past year.




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