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General Motors (GM) Beats on Q4 Earnings, Guidance Intact
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General Motors Co. (GM - Free Report) posted adjusted earnings of $1.28 per share in the fourth quarter of 2016 that surpassed the Zacks Consensus Estimate of $1.14. Earnings in the reported quarter fell 7.9% from $1.39 per share recorded in the fourth quarter of 2015.
Net income (on a reported basis) amounted to $1.8 billion or $1.19 per share, down from $6.3 billion or $3.92 per share in the year-ago quarter.
Revenues in the reported quarter were a record $43.9 billion, 10.8% higher than $39.6 billion in the year-ago quarter. Revenues surpassed the Zacks Consensus Estimate of $42.20 billion.
Worldwide wholesale unit sales went up to 1.65 million vehicles from 1.52 million vehicles in the fourth quarter of 2015. Worldwide retail unit sales moved up to 2.85 million vehicles from 2.72 million vehicles in the year-ago quarter. The automaker’s global market share was 11.5% during the reported quarter, up from 11.4% in the year-ago quarter.
Adjusted earnings before interest and tax (EBIT) fell to $2.4 billion (5.4% of sales) from $2.8 billion (6.9%) in fourth-quarter 2015.
General Motors Company Price, Consensus and EPS Surprise
Adjusted earnings for 2016 jumped 21.9% to a record $6.12 per share from $5.02 earned in 2015. Earnings also surpassed the Zacks Consensus Estimate of $6.01.
Revenues for 2016 increased 9.2% to a record $166.4 billion from $152.4 billion in 2015, and exceeded the Zacks Consensus Estimate of $165.12 billion.
Segment Results
GM North America (“GMNA”) reported a 13.1% rise in revenues to $31.3 billion during fourth quarter of 2016. Adjusted EBIT fell to $2.6 billion from $2.8 billion in the year-ago quarter.
GM Europe (“GME”) witnessed a 6.3% fall in revenues to $4.4 billion in the quarter. The segment reported an adjusted loss of $0.2 billion, narrower than a loss of $0.3 billion recorded in the year-ago quarter.
GM International Operations (“GMIO”) reported a 4.7% decline in revenues to $3.3 billion. Adjusted EBIT was $0.3 billion, down from $0.4 billion in the year-ago quarter.
GM South America (“GMSA”) witnessed a 17.7% growth in revenues to $2.2 billion. The segment reported an adjusted loss of $0.1 billion, compared with break-even results in the year-ago quarter.
GM Financial reported an impressive 43.3% rise in revenues to $2.7 billion during the quarter. The segment’s EBIT was $0.2 billion, in line with the year-ago quarter.
Financial Position
General Motors had cash and cash equivalents of $12.96 billion as of Dec 31, 2016 compared with $15.24 billion as of Dec 31, 2015. Total debt (Automotive and Financial) increased to $84.63 billion as of Dec 31, 2016, from $63.11 billion as of Dec 31, 2015.
During 2016, net cash from operating activities was $16.55 billion compared with $11.69 billion in the comparable year-ago period. Capital expenditures amounted to $9.4 billion in 2016, compared with $7.8 billion in the same period a year ago.
2017 Outlook
General Motors expects 2017 adjusted earnings per share in the range of $6.00 to $6.50, compared with the 2016 figure of $6.12. The automaker also expects adjusted EBIT and adjusted EBIT margin to remain stable or improve, while revenues are projected to rise from 2016. Further, the automaker is expected to generate around $6 billion in adjusted automotive free cash flow.
Price Performance
General Motors underperformed the Zacks categorized Automotive-Domestic industry over the last three months. Share price of the company increased 16% over this period, while the industry saw a 17.4% increase. The share price was affected by decreased U.S. vehicles sales figures for 2016, a recent settlement related to the 2014 ignition switch recall and a large fine by China for monopolistic pricing behavior.
Zacks Rank
General Motors currently carries a Zacks Rank #2 (Buy).
Other favorably placed companies in the auto space include Penske Automotive Group, Inc. (PAG - Free Report) , Fox Factory Holding Corp (FOXF - Free Report) and Honda Motor Co., Ltd. (HMC - Free Report) .
Penske Automotive has expected long-term earnings per share growth rate of 8.2%. It carries a Zacks Rank #2.
Fox Factory holds a Zacks Rank #2. The company has expected earnings growth rate of 16.6% over the long term.
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General Motors (GM) Beats on Q4 Earnings, Guidance Intact
General Motors Co. (GM - Free Report) posted adjusted earnings of $1.28 per share in the fourth quarter of 2016 that surpassed the Zacks Consensus Estimate of $1.14. Earnings in the reported quarter fell 7.9% from $1.39 per share recorded in the fourth quarter of 2015.
Net income (on a reported basis) amounted to $1.8 billion or $1.19 per share, down from $6.3 billion or $3.92 per share in the year-ago quarter.
Revenues in the reported quarter were a record $43.9 billion, 10.8% higher than $39.6 billion in the year-ago quarter. Revenues surpassed the Zacks Consensus Estimate of $42.20 billion.
Worldwide wholesale unit sales went up to 1.65 million vehicles from 1.52 million vehicles in the fourth quarter of 2015. Worldwide retail unit sales moved up to 2.85 million vehicles from 2.72 million vehicles in the year-ago quarter. The automaker’s global market share was 11.5% during the reported quarter, up from 11.4% in the year-ago quarter.
Adjusted earnings before interest and tax (EBIT) fell to $2.4 billion (5.4% of sales) from $2.8 billion (6.9%) in fourth-quarter 2015.
General Motors Company Price, Consensus and EPS Surprise
General Motors Company Price, Consensus and EPS Surprise | General Motors Company Quote
2016 Performance
Adjusted earnings for 2016 jumped 21.9% to a record $6.12 per share from $5.02 earned in 2015. Earnings also surpassed the Zacks Consensus Estimate of $6.01.
Revenues for 2016 increased 9.2% to a record $166.4 billion from $152.4 billion in 2015, and exceeded the Zacks Consensus Estimate of $165.12 billion.
Segment Results
GM North America (“GMNA”) reported a 13.1% rise in revenues to $31.3 billion during fourth quarter of 2016. Adjusted EBIT fell to $2.6 billion from $2.8 billion in the year-ago quarter.
GM Europe (“GME”) witnessed a 6.3% fall in revenues to $4.4 billion in the quarter. The segment reported an adjusted loss of $0.2 billion, narrower than a loss of $0.3 billion recorded in the year-ago quarter.
GM International Operations (“GMIO”) reported a 4.7% decline in revenues to $3.3 billion. Adjusted EBIT was $0.3 billion, down from $0.4 billion in the year-ago quarter.
GM South America (“GMSA”) witnessed a 17.7% growth in revenues to $2.2 billion. The segment reported an adjusted loss of $0.1 billion, compared with break-even results in the year-ago quarter.
GM Financial reported an impressive 43.3% rise in revenues to $2.7 billion during the quarter. The segment’s EBIT was $0.2 billion, in line with the year-ago quarter.
Financial Position
General Motors had cash and cash equivalents of $12.96 billion as of Dec 31, 2016 compared with $15.24 billion as of Dec 31, 2015. Total debt (Automotive and Financial) increased to $84.63 billion as of Dec 31, 2016, from $63.11 billion as of Dec 31, 2015.
During 2016, net cash from operating activities was $16.55 billion compared with $11.69 billion in the comparable year-ago period. Capital expenditures amounted to $9.4 billion in 2016, compared with $7.8 billion in the same period a year ago.
2017 Outlook
General Motors expects 2017 adjusted earnings per share in the range of $6.00 to $6.50, compared with the 2016 figure of $6.12. The automaker also expects adjusted EBIT and adjusted EBIT margin to remain stable or improve, while revenues are projected to rise from 2016. Further, the automaker is expected to generate around $6 billion in adjusted automotive free cash flow.
Price Performance
General Motors underperformed the Zacks categorized Automotive-Domestic industry over the last three months. Share price of the company increased 16% over this period, while the industry saw a 17.4% increase. The share price was affected by decreased U.S. vehicles sales figures for 2016, a recent settlement related to the 2014 ignition switch recall and a large fine by China for monopolistic pricing behavior.
Zacks Rank
General Motors currently carries a Zacks Rank #2 (Buy).
Other favorably placed companies in the auto space include Penske Automotive Group, Inc. (PAG - Free Report) , Fox Factory Holding Corp (FOXF - Free Report) and Honda Motor Co., Ltd. (HMC - Free Report) .
Honda carries a Zacks Rank #1 (Strong Buy) and has long-term growth rate of 23.97%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Penske Automotive has expected long-term earnings per share growth rate of 8.2%. It carries a Zacks Rank #2.
Fox Factory holds a Zacks Rank #2. The company has expected earnings growth rate of 16.6% over the long term.
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In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>