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Why Is General Motors (GM) Down 2.5% Since Last Earnings Report?
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It has been about a month since the last earnings report for General Motors (GM - Free Report) . Shares have lost about 2.5% 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 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 Q1 Earnings Top Estimates
General Motors reported first-quarter 2024 adjusted earnings of $2.62 per share, which surpassed the Zacks Consensus Estimate of $2.08. The bottom line also increased from the year-ago quarter’s level of $2.21. Solid results from the GMNA segment led to the outperformance. Revenues of $43.01 billion beat the Zacks Consensus Estimate of $41.28 billion and increased from $39.9 billion recorded in the year-ago period.
The U.S. auto giant recorded adjusted earnings before interest and taxes (EBIT) of $3.87 billion, slightly higher than $3.8 billion in the prior-year quarter. The automaker’s share in the GM market was 8.1% in the reported quarter compared with 8.7% in the year-ago quarter.
Segmental Performance
GM North America (“GMNA”) generated net revenues of $36.1 billion, up from $32.9 billion recorded in the corresponding period of 2023. The figure also outpaced our model projection of $33.5 billion on higher-than-expected deliveries. Wholesale vehicle sales in the GMNA unit totaled 792,000 units, up from 723,000 units reported in the year-ago quarter. The figure also surpassed our estimate of 718,000 units. The segment’s operating profit totaled $3.84 billion, up from $3.57 billion recorded in the year-earlier period. The metric also exceeded our estimate of $2.75 billion.
GM International's (“GMI”) net revenues in the reported quarter amounted to $3.08 billion, down from the year-ago quarter’s $3.72 billion. The metric also missed our estimate of $3.96 billion due to lower-than-expected deliveries. The segment’s wholesale vehicle sales of 104,000 units decreased from 141,000 units in the year-ago quarter and also missed our projection of 148,000 units. GMI reported an operating loss of $10 million against a profit of $347 million generated in the year-ago period due to low equity income. Our estimate was an operating profit of $464.7 million.
GM Financial generated net revenues of $3.81 billion in the quarter, up from $3.34 billion recorded in the year-ago period and ahead of our prediction of $3.48 billion. The segment recorded an EBIT-adjusted operating profit of $737 million, down from $771 million recorded in the year-ago period. The metric surpassed our prediction of $691 million.
GM Cruise recorded net revenues of $25 million in the fourth quarter, flat year over year. The metric came in line with our projection as well. The segment posted an operating loss of $442 million, narrower than a loss of $561 million reported in the prior-year quarter. The reported loss was, however, wider than our estimate of a loss of $358 million.
Financial Position
General Motors had cash and cash equivalents of $17.64 billion as of Mar 31, 2024. The long-term automotive debt at the end of the quarter was $15.9 billion. Net automotive cash provided by operating activities amounted to $3.6 billion during the quarter under review. The company recorded an adjusted automotive free cash flow of $1.09 billion in first-quarter 2024, significantly improving from negative $132 recorded in the year-ago period.
GM declared its second-quarter dividend of 12 cents per share. The dividend will be paid on Jun 20, 2024, to shareholders of record as of Jun 7, 2024.
Revised 2024 Guidance
For full-year 2024, GM now expects adjusted EBIT in the range of $12.5-$14.5 billion, up from $12-$14 billion guided earlier. Adjusted EPS is anticipated in the range of $9-$10, up from $8.50-$9.50, guided earlier. Adjusted automotive free cash flow is expected in the band of $8.5-$10.5 billion, higher than the prior forecast of $8-$10 billion. Capex is predicted to be in the $10.5-$11.5 billion range, up from the previous guidance of $10-$11 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 14.14% due to these changes.
VGM Scores
Currently, General Motors 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 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. Notably, General Motors 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 (GM) Down 2.5% Since Last Earnings Report?
It has been about a month since the last earnings report for General Motors (GM - Free Report) . Shares have lost about 2.5% 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 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 Q1 Earnings Top Estimates
General Motors reported first-quarter 2024 adjusted earnings of $2.62 per share, which surpassed the Zacks Consensus Estimate of $2.08. The bottom line also increased from the year-ago quarter’s level of $2.21. Solid results from the GMNA segment led to the outperformance. Revenues of $43.01 billion beat the Zacks Consensus Estimate of $41.28 billion and increased from $39.9 billion recorded in the year-ago period.
The U.S. auto giant recorded adjusted earnings before interest and taxes (EBIT) of $3.87 billion, slightly higher than $3.8 billion in the prior-year quarter. The automaker’s share in the GM market was 8.1% in the reported quarter compared with 8.7% in the year-ago quarter.
Segmental Performance
GM North America (“GMNA”) generated net revenues of $36.1 billion, up from $32.9 billion recorded in the corresponding period of 2023. The figure also outpaced our model projection of $33.5 billion on higher-than-expected deliveries. Wholesale vehicle sales in the GMNA unit totaled 792,000 units, up from 723,000 units reported in the year-ago quarter. The figure also surpassed our estimate of 718,000 units. The segment’s operating profit totaled $3.84 billion, up from $3.57 billion recorded in the year-earlier period. The metric also exceeded our estimate of $2.75 billion.
GM International's (“GMI”) net revenues in the reported quarter amounted to $3.08 billion, down from the year-ago quarter’s $3.72 billion. The metric also missed our estimate of $3.96 billion due to lower-than-expected deliveries. The segment’s wholesale vehicle sales of 104,000 units decreased from 141,000 units in the year-ago quarter and also missed our projection of 148,000 units. GMI reported an operating loss of $10 million against a profit of $347 million generated in the year-ago period due to low equity income. Our estimate was an operating profit of $464.7 million.
GM Financial generated net revenues of $3.81 billion in the quarter, up from $3.34 billion recorded in the year-ago period and ahead of our prediction of $3.48 billion. The segment recorded an EBIT-adjusted operating profit of $737 million, down from $771 million recorded in the year-ago period. The metric surpassed our prediction of $691 million.
GM Cruise recorded net revenues of $25 million in the fourth quarter, flat year over year. The metric came in line with our projection as well. The segment posted an operating loss of $442 million, narrower than a loss of $561 million reported in the prior-year quarter. The reported loss was, however, wider than our estimate of a loss of $358 million.
Financial Position
General Motors had cash and cash equivalents of $17.64 billion as of Mar 31, 2024. The long-term automotive debt at the end of the quarter was $15.9 billion. Net automotive cash provided by operating activities amounted to $3.6 billion during the quarter under review. The company recorded an adjusted automotive free cash flow of $1.09 billion in first-quarter 2024, significantly improving from negative $132 recorded in the year-ago period.
GM declared its second-quarter dividend of 12 cents per share. The dividend will be paid on Jun 20, 2024, to shareholders of record as of Jun 7, 2024.
Revised 2024 Guidance
For full-year 2024, GM now expects adjusted EBIT in the range of $12.5-$14.5 billion, up from $12-$14 billion guided earlier. Adjusted EPS is anticipated in the range of $9-$10, up from $8.50-$9.50, guided earlier. Adjusted automotive free cash flow is expected in the band of $8.5-$10.5 billion, higher than the prior forecast of $8-$10 billion. Capex is predicted to be in the $10.5-$11.5 billion range, up from the previous guidance of $10-$11 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 14.14% due to these changes.
VGM Scores
Currently, General Motors 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 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. Notably, General Motors has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.