The good news is that General Motors says that it’s improving. The bad news is that they just posted a third-quarter loss of $1.15 billion.
The company left bankruptcy in July and it plans to pay the government $1 billion before the end of the year. That’s five years ahead of schedule.
Sales rose 21% to $28 billion. GM’s international operations actually saw a profit of $238 million but it lost $651 million in North America. Since January 2005, the company has lost a staggering $88 billion.
My advice continues to be–ignore the carmakers and focus on the parts companies.
The bottom line is that Americans have less money to spend, and it almost always costs more to splurge on a new car than to keep an old one running. Auto-parts retailers have been riding this trend all the way to the bank–and investors are reaping the benefits.
A case study in this is AutoZone (AZO), which I recommend in my Blue Chip Growth newsletter. Thanks to widespread brand recognition and a massive store network, this company is the frontrunner in the auto-parts retail industry. In September, AZO reported that its earnings (on a per-share basis) grew 11% compared with last year’s results. The stock has strong cash flow that will help fuel AZO’s new-store expansion and overall top-line growth going forward.