General Motors (GM - Free Report) reported an adjusted loss of 50 cents per share in second-quarter 2020, narrower than the Zacks Consensus Estimate of loss of $1.72. Higher-than-expected revenues, primarily from the GMNA and GMI segments, resulted in this narrower-than-anticipated loss.
In the year-ago quarter, the company had recorded earnings of $1.64 per share. The pandemic-induced lower demand and sales weighed on the company’s results compared with the second quarter of 2019. The top U.S. carmaker reported revenues of $16,778 million, missing the Zacks Consensus Estimate of $20,475 million. Revenues also decreased from the year-ago figure of $36,060 million.
The automaker’s global market share in GM markets was 10.9% in the reported quarter, reflecting a rise from the year-ago period’s 10.6%.
GM North America (GMNA) generated second-quarter 2020 net revenues of $11,604 million, down from the $28,324 million recorded in the corresponding period of 2019. Nonetheless, revenues from the unit outpaced the Zacks Consensus Estimate of $9,940 million. Vehicle sales came in at 565,089 units, reflecting a year-over-year plunge of 35.5%. The segment incurred an operating loss of $101 million as against the year-ago operating profit of $3,022 million. Results were hurt by lower production as a result of the coronavirus pandemic.
GM International’s (GMI) net revenues were $1,677 million, which declined from the year-ago quarter’s $4,047 million. However, revenues from the segment outpaced the Zacks Consensus Estimate of $2,540 million. Vehicle sales came in at 130,599 units, reflecting a year-over-year decrease of 10%. The unit recorded an operating loss of $270 million, wider than the prior year’s $48 million. Dismal wholesales as a result of the COVID-19 crisis negatively impacted the segment.
GM Financial generated net revenues of $3,423 million in the June-end quarter, down from the $3,639 million recorded in the year-ago period. The segment recorded operating profit of $226 million, marking a decline from the $536 million witnessed in the prior-year quarter. Higher credit provision expense and accelerated depreciation expense due to reduced residual values, both related to the pandemic, acted as dampeners.
GM Cruise recorded net revenues of $28 million in the second quarter, up from the $25 million reported in the year-earlier period. The segment posted an operating loss of $195 million, narrower than the $279-million loss reported in the prior-year quarter.
GM Corporate delivered net revenues of $80 million in second-quarter 2020, up from the $54 million recorded in the year-ago period. The segment reported an operating loss of $196 million, narrower than the $219-million loss posted in the year-ago quarter.
General Motors had cash and cash equivalents of $28.2 billion as of Jun 30, 2020 compared with $19.1 billion as of Dec 31, 2019. Long-term automotive debt stands at $32.2 billion compared with $12.5 billion as of Dec 31, 2019. The company recorded negative adjusted automotive free cash flow (FCF) of $9 billion in second-quarter 2020, as against a positive FCF of $2.5 billion witnessed in the prior-year period.
Zacks Rank & Stocks to Consider
General Motors currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto sector include Sonic Automotive Inc. (SAH - Free Report) , AutoNation (AN - Free Report) and LCI Industries (LCII - Free Report) . While Sonic Automotive and AutoNation sports a Zacks Rank of 1 (Strong Buy), LCI Industries carries a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Sonic Automotive have climbed 34.8%, year to date, compared with the industry’s rise 10.4%.
Shares of AutoNation have rallied 12.2%, year to date, compared with the industry’s rise of 10.4%.
Shares of LCI Industries have appreciated 11.7%, year to date, as against the industry’s decline of 6.1%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained an impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>