Back to top

Image: Bigstock

Why Is GM (GM) Down 1.6% Since Last Earnings Report?

Read MoreHide Full Article

A month has gone by since the last earnings report for General Motors (GM - Free Report) . Shares have lost about 1.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is GM due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

General Motors Q4 Earnings & Revenues Beat Estimates

General Motors reported adjusted earnings of $1.43 per share in fourth-quarter 2018, down 13.3% from the prior-year quarter. However, the bottom line surpassed the Zacks Consensus Estimate of $1.21. The company’s GM North America segment witnessed robust performance in the quarter, driven by a rich vehicle mix and strong pricing for its all-new full-size pickup trucks.

General Motors reported revenues of $38.4 billion, up 1.8% from the year-ago quarter. Further, revenues surpassed the Zacks Consensus Estimate of $37 billion.

During the reported quarter, total sales for the wholesale unit decreased to 1.21 million from 1.24 million in the fourth quarter of 2017. Worldwide retail unit sales decreased to 2.24 million from 2.59 million in the year-ago quarter.
This automaker’s global market share was 9.4% during the reported quarter, reflecting a decline from 10.2% in the year-ago quarter.

2018 Results

In 2018, General Motors reported adjusted earnings of $6.54 per share, down 1.2% from 2017.

The company reported revenues of $147 billion in 2018, up 1% from the 2017 figure.

Segment Results

GM North America (“GMNA”) generated net sales and revenues of $29.8 billion during the fourth quarter of 2018, up from $28.8 billion recorded in fourth-quarter 2017.

GM International’s (“GMI”) net sales and revenues were $5 billion, declining from $5.7 billion in the year-ago quarter.

GM Financial generated net sales and revenues of $3.6 billion during the quarter under review, reflecting an increase from $3.3 billion recorded in the year-ago quarter.

Financial Position

General Motors had cash and cash equivalents of $20.8 billion as of Dec 31, 2018, compared with $15.5 billion as of Dec 31, 2017.

Adjusted automotive free cash flow during the reported quarter was $4.2 billion versus $4.3 billion of free cash used in the prior-year quarter.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions. The consensus estimate has shifted -5.79% due to these changes.

VGM Scores

Currently, GM has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

GM has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


General Motors Company (GM) - free report >>

Published in