General Motors Co. (GM Quick QuoteGM - Free Report) recorded adjusted earnings of $1.86 per share in the second quarter of 2016 that beat the Zacks Consensus Estimate of $1.52 by a wide margin. Earnings also surged 44% from $1.29 per share recorded in the second quarter of 2015.
 

Net income (on a reported basis) amounted to $2.9 billion or $1.81 per share, compared with $1.1 billion or 67 cents per share in the year-ago quarter.

Revenues in the reported quarter were $42.4 billion, 11% higher than $38.2 billion recorded in the year-ago quarter. The top line also surpassed the Zacks Consensus Estimate of $39.09 billion. At constant exchange rates, revenues in second-quarter 2016 were $5 billion higher than the figure recorded in the second quarter of 2015.

Worldwide wholesale unit sales went up to 1.60 million vehicles from 1.47 million vehicles in the second quarter of 2015. Worldwide retail unit sales decreased to 2.38 million vehicles from 2.46 million vehicles in the year-ago quarter. The automaker’s global market share was 10.4% during the reported quarter, down from 11.1% in the year-ago quarter.

Adjusted earnings before interest and tax (EBIT) increased to $3.9 billion (9.3% of sales) from $2.9 billion (7.5%) in second-quarter 2015.

General Motors reported an impressive second-quarter 2016, with record adjusted earnings per share, revenue and adjusted EBIT.

GENERAL MOTORS Price, Consensus and EPS Surprise

GENERAL MOTORS Price, Consensus and EPS Surprise | GENERAL MOTORS Quote

Segment Results

GM North America (“GMNA”) reported a 14% rise in revenues to $30.2 billion during second-quarter 2016. Adjusted EBIT improved 12.1% to a record $3.6 billion from $2.8 billion in the year-ago quarter.

GM Europe (“GME”) witnessed an 8% increase in revenues to $5.4 billion in the quarter. Adjusted EBIT from this region was $0.1 billion compared to breakeven results recorded in the year-ago quarter. This is the first profitable quarter for the segment since second-quarter 2011.

GM International Operations (“GMIO”) reported a 7.5% decline in revenues to $2.83 billion from $3.05 billion in the year-ago quarter. Adjusted EBIT was $0.2 billion, compared with $0.3 billion a year ago.

GM South America (“GMSA”) witnessed a 22.3% fall in revenues to $1.6 billion. The segment reported a loss of $0.1 billion in the quarter, in line with the year-ago quarter.

GM Financial reported an impressive 51.3% rise in revenues to $2.3 billion during the quarter. The segment’s EBIT was $0.3 billion, compared with $0.2 billion in the year-ago quarter.

Financial Position

General Motors had cash and cash equivalents of $18.9 billion as of Jun 30, 2016 compared with $15.2 billion as of Dec 31, 2015. Total debt (Automotive and Financial) increased to $75.3 billion as of Jun 30, 2016, from $63.1 billion as of Dec 31, 2015.

During the first half of 2016, net cash used for operating activities was $5.96 billion compared to cash flow of $6.16 billion in the comparable year-ago period. Capital expenditures amounted to $4.6 billion in the reported quarter, compared with $3.5 billion in the same period a year ago.

2016 Outlook

Based on the strong financial performance in the first half of 2016, General Motors expects 2016 earnings per share in the range of $5.50–$6.00, up from the previous forecast of $5.25–$5.75, and also higher than $5.02 recorded in 2015.

Zacks Rank

General Motors currently carries a Zacks Rank #3 (Hold).

Some better-ranked automobile stocks include Spartan Motors Inc. , Commercial Vehicle Group Inc. (CVGI Quick QuoteCVGI - Free Report) and U.S. Auto Parts Network, Inc. (PRTS Quick QuotePRTS - Free Report) , all carrying a Zacks Rank #2 (Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>