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Why Is General Motors Company (GM) Down 3.1% Since Last Earnings Report?
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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 3.1% 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 drivers.
General Motors Q3 Earnings Top Estimates
General Motors reported third-quarter 2023 adjusted earnings of $2.28 per share, which surpassed the Zacks Consensus Estimate of $1.84 on higher-than-expected profit from GMNA, GMI and Financial segments. The bottom line also increased from the year-ago quarter’s earnings of $2.25 per share. Revenues of $44,131 million beat the Zacks Consensus Estimate of $43,296 million and increased from $41,889 million recorded in the year-ago period.
The U.S. auto giant recorded adjusted earnings before interest and taxes (“EBIT”) of $3,564 million, lower than $4,287 million in the prior-year quarter. The automaker’s share in the GM market was 9.1% in the reported quarter compared with the year-ago quarter’s 9.2%.
Segmental Performance
GM North America (“GMNA”) generated third-quarter net revenues of $36,106 million, up from $34,691 million recorded in the corresponding period of 2022. However, revenues lagged our model projection of $36,557.9 million on lower-than-expected deliveries. Wholesale vehicle sales in the GMNA unit totaled 810,000 units, increasing from 784,000 units reported in the year-ago quarter but missing our estimate of 840,000 units. The segment’s operating profit was $3,526 million, decreasing from $3,894 million recorded in the year-earlier period. The metric, however, beat our forecast of $2,991.9 million thanks to benefits from the fixed cost reduction program.
GM International's (“GMI”) net revenues in the reported quarter came in at $4,330 million, up from the year-ago quarter’s $3,980 million. The metric also surpassed our estimate of $3,628 million due to higher-than-expected deliveries. The segment’s wholesale vehicle sales of 171,000 units decreased from 182,000 units in the year-ago quarter but outpaced our projection of 163,000 units. GMI reported an operating profit of $357 million, which rose from the year-ago profit of $334 million and surpassed our estimate of $312.2 million, driven by favorable pricing, delivery outperformance and the benefits of thefixed cost reduction program.
GM Financial generated net revenues of $3,641 million in the quarter, up from $3,187 million recorded in the year-ago period and ahead of our prediction of $3,076.4 million. The segment recorded an EBIT-adjusted operating profit of $741 million, down from $911 million. The metric, however, outpaced our forecast of $604.6 million thanks to portfolio growth and a higher effective yield.
GM Cruise recorded net revenues of $25 million in the third quarter, the same as revenues recorded in the prior-year quarter. The metric came in line with our projection. The segment posted an operating loss of $732 million, wider than a loss of $497 million reported in the prior-year quarter. The reported loss also came in wider than our estimate of $516.6 million owing to higher-than-expected costs related to operational scaling.
Financial Position
General Motors had cash and cash equivalents of $25,224 million as of Sep 30, 2023 compared with $19,153 million as of Dec 31, 2022. The long-term automotive debt at the end of the quarter was $15,962 million compared with $15,885 million as of Dec 31, 2022.
General Motors’ net automotive cash provided by operating activities amounted to $6,749 million during the quarter under review. The company recorded an adjusted automotive free cash flow of $4,910 million in third-quarter 2023, surging from $4,593 million recorded in the year-ago period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -55.51% due to these changes.
VGM Scores
Currently, General Motors Company has a nice Growth Score of B, 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 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. 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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Why Is General Motors Company (GM) Down 3.1% Since Last Earnings Report?
A month has gone by since the last earnings report for General Motors Company (GM - Free Report) . Shares have lost about 3.1% 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 drivers.
General Motors Q3 Earnings Top Estimates
General Motors reported third-quarter 2023 adjusted earnings of $2.28 per share, which surpassed the Zacks Consensus Estimate of $1.84 on higher-than-expected profit from GMNA, GMI and Financial segments. The bottom line also increased from the year-ago quarter’s earnings of $2.25 per share. Revenues of $44,131 million beat the Zacks Consensus Estimate of $43,296 million and increased from $41,889 million recorded in the year-ago period.
The U.S. auto giant recorded adjusted earnings before interest and taxes (“EBIT”) of $3,564 million, lower than $4,287 million in the prior-year quarter. The automaker’s share in the GM market was 9.1% in the reported quarter compared with the year-ago quarter’s 9.2%.
Segmental Performance
GM North America (“GMNA”) generated third-quarter net revenues of $36,106 million, up from $34,691 million recorded in the corresponding period of 2022. However, revenues lagged our model projection of $36,557.9 million on lower-than-expected deliveries. Wholesale vehicle sales in the GMNA unit totaled 810,000 units, increasing from 784,000 units reported in the year-ago quarter but missing our estimate of 840,000 units. The segment’s operating profit was $3,526 million, decreasing from $3,894 million recorded in the year-earlier period. The metric, however, beat our forecast of $2,991.9 million thanks to benefits from the fixed cost reduction program.
GM International's (“GMI”) net revenues in the reported quarter came in at $4,330 million, up from the year-ago quarter’s $3,980 million. The metric also surpassed our estimate of $3,628 million due to higher-than-expected deliveries. The segment’s wholesale vehicle sales of 171,000 units decreased from 182,000 units in the year-ago quarter but outpaced our projection of 163,000 units. GMI reported an operating profit of $357 million, which rose from the year-ago profit of $334 million and surpassed our estimate of $312.2 million, driven by favorable pricing, delivery outperformance and the benefits of thefixed cost reduction program.
GM Financial generated net revenues of $3,641 million in the quarter, up from $3,187 million recorded in the year-ago period and ahead of our prediction of $3,076.4 million. The segment recorded an EBIT-adjusted operating profit of $741 million, down from $911 million. The metric, however, outpaced our forecast of $604.6 million thanks to portfolio growth and a higher effective yield.
GM Cruise recorded net revenues of $25 million in the third quarter, the same as revenues recorded in the prior-year quarter. The metric came in line with our projection. The segment posted an operating loss of $732 million, wider than a loss of $497 million reported in the prior-year quarter. The reported loss also came in wider than our estimate of $516.6 million owing to higher-than-expected costs related to operational scaling.
Financial Position
General Motors had cash and cash equivalents of $25,224 million as of Sep 30, 2023 compared with $19,153 million as of Dec 31, 2022. The long-term automotive debt at the end of the quarter was $15,962 million compared with $15,885 million as of Dec 31, 2022.
General Motors’ net automotive cash provided by operating activities amounted to $6,749 million during the quarter under review. The company recorded an adjusted automotive free cash flow of $4,910 million in third-quarter 2023, surging from $4,593 million recorded in the year-ago period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -55.51% due to these changes.
VGM Scores
Currently, General Motors Company has a nice Growth Score of B, 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 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, General Motors Company has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.