Morgan Stanley: 'Something's Not Right' At General Motors

General Motors Company's (NYSE: GM) third-quarter results may have sounded at first blush a tad better than reality, while an analyst questioned whether the company is positioning itself for big upcoming changes in the sector.GM closed Friday down nearly 3 percent at $30.04 a share.Morgan Stanley's Adam Jonas said results for the recent period were "fine" with strong results in both North America and China. "But we're left with the feeling that something just isn't right."Jonas called the next several years a "critical" period for the company to lay its long-term strategy, but said company's managers may suffer from complacency and lack of urgency implied by the task.Shorter term, Jonas dismissed GM's 2015 guidance Friday as "aspirational benchmarking rather than real financial targets."Given recent uncertainty about growth in Europe and volatility in China, "no auto company is in a position to confidently forecast any level of performance in 2015," Jonas said, maintaining and Under-Weight rating.Similarly, Deutsche Bank's Rod Lache reiterated a Hold on GM, while praising its recent North American profit margin of 10 percent.But a recent trend toward weaker prices in North America and a slowdown in China's economy may undercut the company's 2015 forecast, Lache said.Cash flow is getting diverted by recall and litigation costs as well as restructuring. "An inflection may be two years away" for the measure, Lache said. "But that is quite far" for investors, especially in light of interim risks.Net income for the recent quarter leaped 81 percent and adjusted earnings of $0.97 a share beat estimates by $0.02.Yet automotive sales dipped 0.3 percent to $37.99 billion from $38.12 billion a year earlier. GM's operating income tumbled 45.6 percent to $1.23 billion from $2.26 billion last year.