MILFORD (Reuters) – General Motors Co said on Wednesday it expects in 2016 to ring up its first profit in Europe in more than a decade and that it will also hit targeted North American operating margins that year.
The projections came two days after its smaller rival, Ford Motor Co, disappointed investors with its financial outlook.
GM had previously said it would hit those targets by mid-decade, but it offered the more specific timetable and outlined other forecasts, including its plans for the critical Chinese market, at its investor meeting at the company’s test track outside Detroit.
Investors want more proof that GM will meet its promises.
“GM is still very much in a ‘show me’ status with the investment community,” Gabelli & Co analyst Brian Sponheimer said. “That it has the confidence to target a profitable Europe is promising, but solid execution by this unproven management team will ultimately win over investors.”
Shares of GM were up 2.6 per cent at $32.78 at midday. The stock is down more than 20 per cent this year and trades below its autumn 2010 initial public offering price of $33.
Investors and analysts also worry that GM is at the peak of its product cycle, having launched new versions of its full-size pickup trucks and SUVs, key profit generators for the company. GM President Dan Ammann said those views are “sadly mistaken,” pointing to plans for 178 new or refreshed product launches from 2015 to 2019.