Back to top

Image: Bigstock

Things to Note Ahead of General Motors' (GM) Q3 Earnings

Read MoreHide Full Article

General Motors (GM - Free Report) is slated to release third-quarter 2021 results on Oct 27, before market open. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at 66 cents per share and $36 billion, respectively.

The Zacks Consensus Estimate for General Motors’ third-quarter earnings per share has been revised downward by 31 cents over the past 30 days. The bottom-line projection also indicates a year-over-year decline of 76.7%. Meanwhile, over the trailing four quarters, the company topped the Zacks Consensus Estimate on all occasions, with the average being 59.1%. This is depicted in the graph below:

General Motors Company Price and EPS Surprise

General Motors Company Price and EPS Surprise

General Motors Company price-eps-surprise | General Motors Company Quote

Earnings Whispers

Our proven 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.

Earnings ESP: It has an Earnings ESP of -16.16%. This is because the Most Accurate Estimate of 55 cents per share is pegged 11 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 Setting the Tone

General Motors’ U.S. vehicle sales took a nasty hit during the third quarter of 2021 amid supply constraints and historically low inventories. Sales plummeted 33% year over year to 446,997 vehicles. Per U.S. Automotive News, this marks the company's lowest three-month tally since its 2009 bankruptcy. The auto giant saw double-digit percentage declines across all major brands including Chevrolet (36.1%), GMC (26.7%), Buick (20.1%) and Cadillac (31.7%). Consequently, the Zacks Consensus Estimate for quarterly revenues for the GM North America segment is pegged at $20,855 million, indicating a fall from the year-ago figure of $29,128 million.

Sales volume was also affected in China — wherein the company demands a significant presence — amid the pandemic and chip-related disruptions. General Motors delivered 623,000 vehicles in the country in third-quarter 2021, indicating a fall from 771,400 units in the corresponding period of 2020, with sales declining across all brands apart from Wuling. The Zacks Consensus Estimate for quarterly revenues for the GM International segment is pegged at $2,459 million, indicating a deterioration from the year-ago figure of $2,735 million.

The consensus estimate for revenues from GM Cruise is pegged at $25 million, suggesting a marginal decline from $26 million in third-quarter 2020. On a slightly positive note, the consensus mark for revenues from GM Financial of $3,448 million implies an improvement from the year-ago reported figure of $3,421 million.

Stocks to Consider

Here are a few auto stocks worth considering, as these have the right combination of elements to come up with an earnings beat this time around:

Penske Automotive (PAG - Free Report) has an Earnings ESP of +6.64% and currently carries a Zacks Rank #3. The company is set to report third-quarter 2021 earnings on Oct 27.

Sonic Automotive (SAH - Free Report) has an Earnings ESP of +5.51% and holds a Zacks Rank of 2, at present. The company is slated to release quarterly figures on Oct 28.

Group 1 Automotive (GPI - Free Report) has an Earnings ESP of +1.52% and carries a Zacks Rank #2, currently. The company’s third-quarter 2021 results are scheduled to be out on Oct 28.

Published in