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General Motors (GM) to Report Q1 Earnings: What's in Store?

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General Motors Company (GM - Free Report) is set to report first-quarter 2018 results before the opening bell on Apr 26. Last quarter, the company delivered a positive earnings surprise of 23.1%.

In fact, in each of the trailing four quarters, the company delivered a positive earnings surprise, with the average being 18.4%. Also, the long-term expected earnings growth for the company (over three to five years) is currently pegged at 8.4%.

General Motors’ shares have plunged 19.1% in the past six months, underperforming the 13.3% decline of the industry it belongs to.

Let’s see how things are shaping up for this announcement.

Factors Influencing This Quarter

On the fourth-quarter earnings call, General Motors had provided a bullish outlook for the near future, mainly backed by strength in North America, China and South America, growth in GM Financial segment, and continued cost efficiencies. The company aims to increase loyalty among users by expanding its customer relation management activities. Adjusted EBT is expected to double from the 2014 level by 2018 on the achievement of the complete captive penetration levels.

For the soon-to-be-reported quarter, the Zacks Consensus Estimate for revenues of General Motors North America (GMNA) is $278 billion. In fourth-quarter 2017, net sales and revenues from General Motors North America were $28.8 billion. Notably, in 2017, around 76.5% of total revenues of the company were derived from the GMNA segment.

Per Autodata Corp., in February 2018, General Motors reported a 6.9% year over year decline in U.S. sales. In March, however, General Motors posted a sales increase of 15.7% year over year to 296,341 vehicles. This upside was attributable to Chevrolet, GMC, Buick and Cadillac brands.

Earnings Whispers

Our proven model does not conclusively show an earnings beat for General Motors this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.

Zacks ESP: General Motors’ Earnings ESP is -2.21% as the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.20 and $1.22, respectively.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: General Motors carries a Zacks Rank #3.

We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

Here are some stocks worth considering from the same space, with the right combination of elements to outpace earnings estimates this time around:

BorgWarner Inc. (BWA - Free Report) has an Earnings ESP of +0.83% and a Zacks Rank #2. Its first-quarter 2018 results are expected to be released on Apr 26. You can see the complete list of today’s Zacks #1 Rank stocks here.

American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) has an Earnings ESP of +3.45% and has a Zacks Rank of 3. It is expected to report first-quarter 2018 results on May 4.

Cummins Inc. (CMI - Free Report) has an Earnings ESP of +0.44% and is a #2 Ranked player. Its first-quarter 2018 results are slated to be announced on May 1.

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