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General Motors Company (GM) Down 12.4% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for General Motors Company (GM - Free Report) . Shares have lost about 12.4% 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 the most recent earnings report in order to get a better handle on the important drivers.
General Motors Q2 Earnings Top Estimates
General Motors reported second-quarter 2023 adjusted earnings of $1.91 per share, which surpassed the Zacks Consensus Estimate of $1.73. The outperformance can be primarily attributed to better-than-expected results from the North America market. The bottom line also rose from the year-ago quarter’s earnings of $1.14 per share. Revenues of $44,746 million beat the Zacks Consensus Estimate of $42,478 million and increased from $35,759 million recorded in the year-ago period.
The U.S. auto giant recorded adjusted earnings before interest and taxes (EBIT) of $3,585 million, higher than $3,072 million in the prior-year quarter. The automaker’s share in the GM market was 9.3% in the reported quarter, compared with the year-ago quarter’s 9.4%.
Segmental Performance
GM North America (GMNA) generated second-quarter net revenues of $37,220 million, up from $28,760 million recorded in the corresponding period of 2022. Also, revenues from the unit outpaced our model projection of $33,283.4 million on higher-than-expected deliveries as vehicle demand remained strong despite the high costs of borrowing. Wholesale vehicle sales in the GMNA unit totaled 833,000 units, increasing from 662,000 units reported in the year-ago quarter and topping our estimate of 738,000 units. The segment’s operating profit came in at $3,194 million, increasing from $2,299 million recorded in the year-earlier period. The metric also beat our forecast of $3,004.8 million.
GM International's (GMI) net revenues in the reported quarter came in at $3,955 million, up from the year-ago quarter’s $3,807 million. The metric, however, fell short of our estimate of $4,376 million due to lower-than-expected deliveries. The segment’s wholesale vehicle sales of 147,000 units decreased from 155,000 units in the year-ago quarter and missed our projection of 172,000 units. GMI reported an operating profit of $236 million, which rose from the year-ago profit of $209 million but lagged our estimate of $378 million. Notably, the second quarter of 2022 included $0.2 billion Momenta mark-to-market gains.
GM Financial generated net revenues of $3,498 million in the quarter, up from $3,146 million recorded in the year-ago period and ahead of our prediction of $3,019 million. The segment recorded an EBIT-adjusted operating profit of $766 million, down from $1,106 million. The metric outpaced our forecast of $643 million, thanks to loan portfolio growth and higher effective yield.
GM Cruise recorded net revenues of $26 million in the second quarter compared with $25 million recorded in the prior-year quarter. The metric exceeded our projection by $1 million. The segment posted an operating loss of $611 million, wider than a loss of $543 million reported in the prior-year quarter. The reported loss also came in wider than our estimate of $527 million owing to higher-than-expected costs related to operational scaling.
Financial Position
General Motors had cash and cash equivalents of $23,074 million as of Jun 30, 2023, compared with $19,153 million as of Dec 31, 2022. The long-term automotive debt at the end of the quarter was $15,976 million compared with $15,885 million as of Dec 31, 2022.
General Motors’ net automotive cash provided by operating activities amounted to $7,114 million during the quarter under review. The company recorded an adjusted automotive free cash flow of $5,548 million in second-quarter 2023, surging from $1,407 million recorded in the year-ago period.
2023 Guidance Updated
For 2023, General Motors’ full-year net income is estimated in the band of $9.3-$10.7 billion, up from the previously guided $8.4-$9.9 billion range. The adjusted EBIT forecast was revised upward to $12-$14 billion from $11-$13 billion guided before. Adjusted EPS is expected in the band of $7.15-$8.15 a share, up from the prior forecast of $6.35-$7.35. Adjusted automotive free cash flow is envisioned between $7 billion and $9 billion, up from the previous projection of $5.5-$7.5 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 16.2% due to these changes.
VGM Scores
Currently, General Motors Company has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, 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
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise General Motors Company has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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General Motors Company (GM) Down 12.4% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for General Motors Company (GM - Free Report) . Shares have lost about 12.4% 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 the most recent earnings report in order to get a better handle on the important drivers.
General Motors Q2 Earnings Top Estimates
General Motors reported second-quarter 2023 adjusted earnings of $1.91 per share, which surpassed the Zacks Consensus Estimate of $1.73. The outperformance can be primarily attributed to better-than-expected results from the North America market. The bottom line also rose from the year-ago quarter’s earnings of $1.14 per share. Revenues of $44,746 million beat the Zacks Consensus Estimate of $42,478 million and increased from $35,759 million recorded in the year-ago period.
The U.S. auto giant recorded adjusted earnings before interest and taxes (EBIT) of $3,585 million, higher than $3,072 million in the prior-year quarter. The automaker’s share in the GM market was 9.3% in the reported quarter, compared with the year-ago quarter’s 9.4%.
Segmental Performance
GM North America (GMNA) generated second-quarter net revenues of $37,220 million, up from $28,760 million recorded in the corresponding period of 2022. Also, revenues from the unit outpaced our model projection of $33,283.4 million on higher-than-expected deliveries as vehicle demand remained strong despite the high costs of borrowing. Wholesale vehicle sales in the GMNA unit totaled 833,000 units, increasing from 662,000 units reported in the year-ago quarter and topping our estimate of 738,000 units. The segment’s operating profit came in at $3,194 million, increasing from $2,299 million recorded in the year-earlier period. The metric also beat our forecast of $3,004.8 million.
GM International's (GMI) net revenues in the reported quarter came in at $3,955 million, up from the year-ago quarter’s $3,807 million. The metric, however, fell short of our estimate of $4,376 million due to lower-than-expected deliveries. The segment’s wholesale vehicle sales of 147,000 units decreased from 155,000 units in the year-ago quarter and missed our projection of 172,000 units. GMI reported an operating profit of $236 million, which rose from the year-ago profit of $209 million but lagged our estimate of $378 million. Notably, the second quarter of 2022 included $0.2 billion Momenta mark-to-market gains.
GM Financial generated net revenues of $3,498 million in the quarter, up from $3,146 million recorded in the year-ago period and ahead of our prediction of $3,019 million. The segment recorded an EBIT-adjusted operating profit of $766 million, down from $1,106 million. The metric outpaced our forecast of $643 million, thanks to loan portfolio growth and higher effective yield.
GM Cruise recorded net revenues of $26 million in the second quarter compared with $25 million recorded in the prior-year quarter. The metric exceeded our projection by $1 million. The segment posted an operating loss of $611 million, wider than a loss of $543 million reported in the prior-year quarter. The reported loss also came in wider than our estimate of $527 million owing to higher-than-expected costs related to operational scaling.
Financial Position
General Motors had cash and cash equivalents of $23,074 million as of Jun 30, 2023, compared with $19,153 million as of Dec 31, 2022. The long-term automotive debt at the end of the quarter was $15,976 million compared with $15,885 million as of Dec 31, 2022.
General Motors’ net automotive cash provided by operating activities amounted to $7,114 million during the quarter under review. The company recorded an adjusted automotive free cash flow of $5,548 million in second-quarter 2023, surging from $1,407 million recorded in the year-ago period.
2023 Guidance Updated
For 2023, General Motors’ full-year net income is estimated in the band of $9.3-$10.7 billion, up from the previously guided $8.4-$9.9 billion range. The adjusted EBIT forecast was revised upward to $12-$14 billion from $11-$13 billion guided before. Adjusted EPS is expected in the band of $7.15-$8.15 a share, up from the prior forecast of $6.35-$7.35. Adjusted automotive free cash flow is envisioned between $7 billion and $9 billion, up from the previous projection of $5.5-$7.5 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 16.2% due to these changes.
VGM Scores
Currently, General Motors Company has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, 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
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise General Motors Company has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.