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General Motors (GM) Q1 Earnings & Revenues Top, View Same

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General Motors Co. (GM - Free Report) posted record adjusted earnings of $1.70 per share in the first quarter of 2017 that surpassed the Zacks Consensus Estimate of $1.45. Earnings in the reported quarter rose 34.9% from $1.26 per share recorded in the first quarter of 2016.

Net income (on a reported basis) amounted to $2.6 billion or $1.70 per share, up from $1.95 billion or $1.24 per share in the year-ago quarter.

Revenues in the reported quarter were a first-quarter record of $41.2 billion, 10.6% higher than $37.3 billion in the year-ago quarter. Revenues also surpassed the Zacks Consensus Estimate of $40.25 billion.

Worldwide wholesale unit sales went up to 1.48 million vehicles, also a first-quarter record, from 1.41 million vehicles in the first quarter of 2016. Worldwide retail unit sales however moved down to 2.34 million vehicles from 2.38 million vehicles in the year-ago quarter. The automaker’s global market share was 10.4% during the reported quarter, slightly down from 10.6% in the year-ago quarter.

Adjusted earnings before interest and tax (EBIT) rose to $3.4 billion (8.2% of sales), also a first-quarter record, from $2.7 billion (7.1%) in first-quarter 2016.

General Motors Company Price, Consensus and EPS Surprise

 

General Motors Company Price, Consensus and EPS Surprise | General Motors Company Quote

Segment Results

GM North America (“GMNA”) reported a 10.6% rise in revenues to $29.3 billion during the first quarter of 2017. Adjusted EBIT rose to $3.4 billion from $2.3 billion in the year-ago quarter.

GM Europe (“GME”) witnessed a 4.3% fall in revenues to $4.5 billion in the quarter. The segment reported an adjusted loss of $0.2 billion, against the breakeven recorded in the year-ago quarter.

GM International Operations (“GMIO”) reported a 7.4% decline in revenues to $2.5 billion. Adjusted EBIT was $0.3 billion, down from $0.4 billion in the year-ago quarter.

GM South America (“GMSA”) witnessed 53.8% growth in revenues to $2 billion. The segment reported an adjusted loss of $0.1 billion, flat year over year.

GM Financial reported an impressive 38.1% rise in revenues to $2.9 billion during the quarter. The segment’s EBIT was $0.3 billion, up 50% from the year-ago quarter.

Financial Position

General Motors had cash and cash equivalents of $12.86 billion as of Mar 31, 2017, compared with $12.96 billion as of Dec 31, 2016. Total debt (Automotive and Financial) increased to $90.9 billion as of Mar 31, 2017, from $84.63 billion as of Dec 31, 2016.

During first-quarter 2017, net cash from operating activities was $2.04 billion, compared with $108 million used in the comparable year-ago period. Capital expenditures amounted to $1.98 billion in first-quarter 2017, compared with $2.27 billion in the same period a year ago.

2017 Outlook

General Motors continues to expect 2017 adjusted earnings per share in the range of $6.00–$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. The company aims capital deployment worth $7 billion to shareholders in 2017.

Price Performance

General Motors underperformed the Zacks categorized Automotive-Domestic industry in the last three months. Share price of the company decreased 4.9% over this period, while the industry saw a 2% increase.

Zacks Rank

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

Some better-ranked companies in the auto space include Fiat Chrysler Automobiles N.V. , Gentex Corporation (GNTX - Free Report) and Lear Corporation (LEA - Free Report) . All stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fiat Chrysler has an expected long-term growth rate of 21.7%.

Gentex has an expected growth rate of around 10.4% over the long term.

Lear has an expected long-term growth rate of 8.9%.

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