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General Motors (GM) to Report Q4 Earnings: What Lies Ahead?
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General Motors (GM - Free Report) is slated to release fourth-quarter 2020 results on Feb 10, before market open. The Zacks Consensus Estimate for the quarter’s earnings is pegged at $1.62 per share on revenues of $36.9 billion.
The auto giant posted a higher-than-anticipated profit in the last reported quarter on solid revenues in the North American segment.
General Motors surpassed estimates in each of the trailing four quarters, the average surprise being 138.34%. This is depicted in the graph below:
The Zacks Consensus Estimate for General Motors’ fourth-quarter earnings per share has been revised upward by 3 cents to $1.62 over the past seven days. This also compares favorably with the year-ago quarter’s earnings per share of five cents. Moreover, the Zacks Consensus Estimate for revenues suggests a year-over-year increase of 19.7%.
Earnings Whispers
Our proven Zacks model does not conclusively predict an earnings beat for General Motors this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here as elaborated below.
Earnings ESP: General Motors has an Earnings ESP of -3.02%. This is because the Most Accurate Estimate is pegged four cents lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The auto industry is influenced by a number of strong macroeconomic factors and is highly sensitive to overall strength of the economy. With the economy in unhealthy state and new Covid-19 strains prolonging the second wave of infections, customers are likely to have put discretionary expenses on hold. Consequently, the fourth-quarter performance of General Motors might have been adversely impacted.
The consensus estimate for net sales in the North American market (which contributes a bulk of the company’s total revenues) is pinned at $28,547 million, up from the $22,706 million recorded in the fourth quarter of 2019. Importantly, the consensus mark for wholesale volumes in the said segment is 821,000 units, calling for a year-on-year jump of 20%.
Moreover, General Motors’ retail sales in the United States during the quarter under review jumped to 771,323 vehicles from the prior quarter’s 665,192 vehicles, thanks to the gaining sales momentum of Chevrolet Silverado and record GMC Sierra deliveries.
However, for the December-end quarter, the Zacks Consensus Estimate for net sales in the International market is pegged at $3,555 million, down from the $4,420 million recorded in the prior-year quarter. In fact, the consensus mark for wholesale volumes in the International markets is 214,000 units, calling for a year-on-year decline of 20%.
For the to-be-reported quarter, the Zacks Consensus Estimate for net sales in the Financial segment is pinned at $3,536 million, down from the $3,636 recorded in the prior-year quarter but up from the $3,421 million recorded in the previous quarter.
Thus, though the rising sales in the North American market are likely to have aided the fourth-quarter margins for General Motors, dismal demand in the International market might have dented the overall revenues.
Stocks to Consider
Here are a few stocks worth considering, as these have the right combination of elements to come up with an earnings beat this time around:
BorgWarner (BWA - Free Report) has an Earnings ESP of +2.94% and carries a Zacks Rank #3, currently. The company is scheduled to report quarterly numbers on Feb 11.
Allison Transmission Holdings (ALSN - Free Report) has an Earnings ESP of +7.44% and carries a Zacks Rank #3 at present. The company will announce fourth-quarter 2020 results on Feb 17.
Magna International (MGA - Free Report) has an Earnings ESP of +5.42% and currently flaunts a Zacks Rank of 1. The company is slated to release earnings numbers on Feb 19.
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General Motors (GM) to Report Q4 Earnings: What Lies Ahead?
General Motors (GM - Free Report) is slated to release fourth-quarter 2020 results on Feb 10, before market open. The Zacks Consensus Estimate for the quarter’s earnings is pegged at $1.62 per share on revenues of $36.9 billion.
The auto giant posted a higher-than-anticipated profit in the last reported quarter on solid revenues in the North American segment.
General Motors surpassed estimates in each of the trailing four quarters, the average surprise being 138.34%. This is depicted in the graph below:
General Motors Company Price and EPS Surprise
General Motors Company price-eps-surprise | General Motors Company Quote
Which Way are the Estimates Headed?
The Zacks Consensus Estimate for General Motors’ fourth-quarter earnings per share has been revised upward by 3 cents to $1.62 over the past seven days. This also compares favorably with the year-ago quarter’s earnings per share of five cents. Moreover, the Zacks Consensus Estimate for revenues suggests a year-over-year increase of 19.7%.
Earnings Whispers
Our proven Zacks model does not conclusively predict an earnings beat for General Motors this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here as elaborated below.
Earnings ESP: General Motors has an Earnings ESP of -3.02%. This is because the Most Accurate Estimate is pegged four cents lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: General Motors currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors at Play
The auto industry is influenced by a number of strong macroeconomic factors and is highly sensitive to overall strength of the economy. With the economy in unhealthy state and new Covid-19 strains prolonging the second wave of infections, customers are likely to have put discretionary expenses on hold. Consequently, the fourth-quarter performance of General Motors might have been adversely impacted.
The consensus estimate for net sales in the North American market (which contributes a bulk of the company’s total revenues) is pinned at $28,547 million, up from the $22,706 million recorded in the fourth quarter of 2019. Importantly, the consensus mark for wholesale volumes in the said segment is 821,000 units, calling for a year-on-year jump of 20%.
Moreover, General Motors’ retail sales in the United States during the quarter under review jumped to 771,323 vehicles from the prior quarter’s 665,192 vehicles, thanks to the gaining sales momentum of Chevrolet Silverado and record GMC Sierra deliveries.
However, for the December-end quarter, the Zacks Consensus Estimate for net sales in the International market is pegged at $3,555 million, down from the $4,420 million recorded in the prior-year quarter. In fact, the consensus mark for wholesale volumes in the International markets is 214,000 units, calling for a year-on-year decline of 20%.
For the to-be-reported quarter, the Zacks Consensus Estimate for net sales in the Financial segment is pinned at $3,536 million, down from the $3,636 recorded in the prior-year quarter but up from the $3,421 million recorded in the previous quarter.
Thus, though the rising sales in the North American market are likely to have aided the fourth-quarter margins for General Motors, dismal demand in the International market might have dented the overall revenues.
Stocks to Consider
Here are a few stocks worth considering, as these have the right combination of elements to come up with an earnings beat this time around:
BorgWarner (BWA - Free Report) has an Earnings ESP of +2.94% and carries a Zacks Rank #3, currently. The company is scheduled to report quarterly numbers on Feb 11.
Allison Transmission Holdings (ALSN - Free Report) has an Earnings ESP of +7.44% and carries a Zacks Rank #3 at present. The company will announce fourth-quarter 2020 results on Feb 17.
Magna International (MGA - Free Report) has an Earnings ESP of +5.42% and currently flaunts a Zacks Rank of 1. The company is slated to release earnings numbers on Feb 19.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>