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Why Is GM (GM) Down 2.9% 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 2.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is GM 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 & Revenues Miss Estimates
General Motors reported second-quarter 2018 adjusted earnings per share of $1.81, down 4.2% from the prior-year quarter. The bottom line also lagged the Zacks Consensus Estimate of $1.84. Significant rise in commodity costs and unfavorable foreign exchange adversely affected the results.
General Motors reported revenues of $36.8 billion, down 0.6% from the year-ago quarter figure. Further, revenues came in lower than the Zacks Consensus Estimate of $37 billion.
During the last reported quarter, total sales for the wholesale unit declined to 1.20 million from 1.21 million in the second quarter of 2017. Worldwide retail-unit sales decreased to 2.06 million from 2.34 million in the year-ago quarter. The automaker’s global market share was 8.6% during the reported quarter, reflecting a decline from 10.2% in the year-ago quarter.
Segment Results
GM North America (GMNA) generated net sales and revenues of $28.5 billion during the second quarter of 2018, marginally up from $28.4 billion recorded in second-quarter 2017.
GM International (GMI) net sales and revenues were $4.8 billion, declining from $5.5 billion in the year-ago quarter.
GM Financial generated net sales and revenues of $3.5 billion during the quarter under review, reflecting an increase from $3 billion recorded in the year-ago quarter.
Financial Position
General Motors had cash and cash equivalents of $15.1 billion as of Jun 30, 2018, compared with $15.5 billion as of Dec 31, 2017.
Second-quarter 2018, adjusted automotive free cash flow during the reported quarter was $2.6 billion compared with $2.3 billion recorded in the prior-year quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -24.5% due to these changes.
VGM Scores
At this time, GM 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 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.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, GM 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 GM (GM) Down 2.9% 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 2.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is GM 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 & Revenues Miss Estimates
General Motors reported second-quarter 2018 adjusted earnings per share of $1.81, down 4.2% from the prior-year quarter. The bottom line also lagged the Zacks Consensus Estimate of $1.84. Significant rise in commodity costs and unfavorable foreign exchange adversely affected the results.
General Motors reported revenues of $36.8 billion, down 0.6% from the year-ago quarter figure. Further, revenues came in lower than the Zacks Consensus Estimate of $37 billion.
During the last reported quarter, total sales for the wholesale unit declined to 1.20 million from 1.21 million in the second quarter of 2017. Worldwide retail-unit sales decreased to 2.06 million from 2.34 million in the year-ago quarter. The automaker’s global market share was 8.6% during the reported quarter, reflecting a decline from 10.2% in the year-ago quarter.
Segment Results
GM North America (GMNA) generated net sales and revenues of $28.5 billion during the second quarter of 2018, marginally up from $28.4 billion recorded in second-quarter 2017.
GM International (GMI) net sales and revenues were $4.8 billion, declining from $5.5 billion in the year-ago quarter.
GM Financial generated net sales and revenues of $3.5 billion during the quarter under review, reflecting an increase from $3 billion recorded in the year-ago quarter.
Financial Position
General Motors had cash and cash equivalents of $15.1 billion as of Jun 30, 2018, compared with $15.5 billion as of Dec 31, 2017.
Second-quarter 2018, adjusted automotive free cash flow during the reported quarter was $2.6 billion compared with $2.3 billion recorded in the prior-year quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -24.5% due to these changes.
VGM Scores
At this time, GM 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 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.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, GM has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.