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General Motors Company (GM) Down 13.4% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for General Motors Company (GM - Free Report) . Shares have lost about 13.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is General Motors Company 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 and Sales Top Estimates
General Motors reported fourth-quarter 2021 adjusted earnings of $1.35 per share, topping the Zacks Consensus Estimate of $1.15. Better-than-expected profits from its North America and Financial segments drove this outperformance. The bottom line, however, compares unfavorably with year-ago quarter’s earnings of $1.93 per share.
Revenues of $33,584 million also surpassed the Zacks Consensus Estimate of $29,221 million. The top line compares unfavorably with the year-ago figure of $37,518 million. The company recorded adjusted earnings before interest and taxes (EBIT) of $2,839 million, lower than $3,712 million in the prior-year quarter. This downside resulted from the semiconductor headwinds faced by GM and rising commodity and logistics costs, partially offset by strong pricing on full-size pickups and full-size SUVs
The automaker’s market share in the GM market was 8.9% in the reported quarter, down from the year-ago quarter’s 10.9%.
Segmental Performance
GM North America (GMNA) generated fourth-quarter net revenues of $26,865 million, down from the $30,170 million recorded in the corresponding period of 2020. Nonetheless, revenues from the unit outpaced the Zacks Consensus Estimate of $24,931 million. The region’s wholesale vehicle sales of 579,000 units declined from the 802,000 units reported in the year-ago quarter but topped the consensus mark of 574,000 units. The segment’s operating profit came in at $2,165 million, lower than the $2,612 million witnessed in the year-earlier period. However, the segmental profit topped the consensus mark of $1,836 million.
GM International’s (GMI) net revenues in the reported quarter came in at $3,451 million, down from the year-ago quarter’s $3,894 million. The reported metric also missed the consensus mark of $4,208 million. The segment’s wholesale vehicle sales of 163,000 units declined from 216,000 units reported in the year-ago quarter and missed the consensus mark of 180,000 units. The unit reported an operating profit of $275 million, lower than the year-ago profit of $283 million. It missed the consensus mark of $363 million.
GM Financial generated net revenues of $3,232 million in the December quarter, down from $3,426 million recorded in the year-ago period and missed the consensus mark of $3,398 million. Also, the segment recorded an operating profit of $1,180 million, up from $1,039 million and beat the consensus mark of $905 million.
GM Cruise witnessed net revenues of $25 million in the fourth quarter, marginally up from $24 million reported in the year-earlier period and matched the consensus mark. The segment posted an operating loss of $349 million, wider than the $260 million loss reported in the prior-year quarter. The loss was also wider than the consensus mark of a loss of $313 million.
Financial Position
General Motors had cash and cash equivalents of $20,067 million as of Dec 31, 2021, compared with $19,992 million at the end of 2020. The long-term automotive debt at the end of the quarter was $16.4 billion compared with $16.2 billion as of Dec 31, 2020.
General Motors’ automotive cash provided by operating activities amounted to $9,384 million at the end of the reported quarter, a significant rise from $5,243 million in the prior-year period. The company recorded adjusted automotive free cash flow of $6,403 million in fourth-quarter 2021, increasing from $3,433 million.
2022 Guidance
For 2022, the company expects full-year net income to be in a range of $9.4-$10.8 billion and adjusted EBIT forecast to be in a range of $13.0 billion to $15.0 billion, taking into consideration continued steady demand for new vehicles and no significant new economic or supply chain challenges. Adjusted EPS is expected in the $6.25 to $7.25 range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, General Motors Company has an average Growth Score of C, however its Momentum Score is doing a bit 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 20% 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
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, General Motors Company has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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General Motors Company (GM) Down 13.4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for General Motors Company (GM - Free Report) . Shares have lost about 13.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is General Motors Company 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 and Sales Top Estimates
General Motors reported fourth-quarter 2021 adjusted earnings of $1.35 per share, topping the Zacks Consensus Estimate of $1.15. Better-than-expected profits from its North America and Financial segments drove this outperformance. The bottom line, however, compares unfavorably with year-ago quarter’s earnings of $1.93 per share.
Revenues of $33,584 million also surpassed the Zacks Consensus Estimate of $29,221 million. The top line compares unfavorably with the year-ago figure of $37,518 million. The company recorded adjusted earnings before interest and taxes (EBIT) of $2,839 million, lower than $3,712 million in the prior-year quarter. This downside resulted from the semiconductor headwinds faced by GM and rising commodity and logistics costs, partially offset by strong pricing on full-size pickups and full-size SUVs
The automaker’s market share in the GM market was 8.9% in the reported quarter, down from the year-ago quarter’s 10.9%.
Segmental Performance
GM North America (GMNA) generated fourth-quarter net revenues of $26,865 million, down from the $30,170 million recorded in the corresponding period of 2020. Nonetheless, revenues from the unit outpaced the Zacks Consensus Estimate of $24,931 million. The region’s wholesale vehicle sales of 579,000 units declined from the 802,000 units reported in the year-ago quarter but topped the consensus mark of 574,000 units. The segment’s operating profit came in at $2,165 million, lower than the $2,612 million witnessed in the year-earlier period. However, the segmental profit topped the consensus mark of $1,836 million.
GM International’s (GMI) net revenues in the reported quarter came in at $3,451 million, down from the year-ago quarter’s $3,894 million. The reported metric also missed the consensus mark of $4,208 million. The segment’s wholesale vehicle sales of 163,000 units declined from 216,000 units reported in the year-ago quarter and missed the consensus mark of 180,000 units. The unit reported an operating profit of $275 million, lower than the year-ago profit of $283 million. It missed the consensus mark of $363 million.
GM Financial generated net revenues of $3,232 million in the December quarter, down from $3,426 million recorded in the year-ago period and missed the consensus mark of $3,398 million. Also, the segment recorded an operating profit of $1,180 million, up from $1,039 million and beat the consensus mark of $905 million.
GM Cruise witnessed net revenues of $25 million in the fourth quarter, marginally up from $24 million reported in the year-earlier period and matched the consensus mark. The segment posted an operating loss of $349 million, wider than the $260 million loss reported in the prior-year quarter. The loss was also wider than the consensus mark of a loss of $313 million.
Financial Position
General Motors had cash and cash equivalents of $20,067 million as of Dec 31, 2021, compared with $19,992 million at the end of 2020. The long-term automotive debt at the end of the quarter was $16.4 billion compared with $16.2 billion as of Dec 31, 2020.
General Motors’ automotive cash provided by operating activities amounted to $9,384 million at the end of the reported quarter, a significant rise from $5,243 million in the prior-year period. The company recorded adjusted automotive free cash flow of $6,403 million in fourth-quarter 2021, increasing from $3,433 million.
2022 Guidance
For 2022, the company expects full-year net income to be in a range of $9.4-$10.8 billion and adjusted EBIT forecast to be in a range of $13.0 billion to $15.0 billion, taking into consideration continued steady demand for new vehicles and no significant new economic or supply chain challenges. Adjusted EPS is expected in the $6.25 to $7.25 range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, General Motors Company has an average Growth Score of C, however its Momentum Score is doing a bit 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 20% 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
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, General Motors Company has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.