GM shares rose 3.6 percent to $31.27, near their initial public offering debut of $33 in the fall of 2010, and hit the highest point since July of 2011.
The increase is welcome news for GM’s largest shareholder, the U.S. Treasury, which acquired its stake after a taxpayer-funded bailout. Treasury, which says it will sell its remaining position over the next year, gains almost $250 million (£160.9 million) for every $1 increase in GM’s stock price.
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"GM, while still beset with issues, is generally executing better than investors give it credit for," Barclays (LSE: BARC.L – news) analyst Brian Johnson said in a research note.
The company still expects to return to breakeven by mid-decade in Europe, where it has reported 13 straight years of losses, said GM Chief Financial Officer Dan Ammann.
RBC Capital Markets analyst Joseph Spak welcomed the results, pointing to the company’s ability to cut costs.
"Better-than-expected results (in Europe) will be well received, giving investors confidence that progress is being made and breakeven by mid-decade is possible," he said in a research note.
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By GlobalDataGM’s smaller U.S. rival Ford Motor Co (NYSE: F – news) last week posted a stronger-than-expected first-quarter profit on strength in North America, but overall costs spiked as it took steps to reinvest in its global lineup and shore up European operations.
About $225 million in higher structural costs in the quarter stemmed from Ford’s efforts to fix the European business after an economic downturn hit consumer demand for new cars.
