General Motors (GM) Beats On Q3 Earnings & Revenues

General Motors Co. GM posted adjusted earnings of $1.72 per share in the third quarter of 2016 that comfortably surpassed the Zacks Consensus Estimate of $1.44. The figure marked a third-quarter record for the company. Earnings in the reported quarter surged 14.7% from $1.50 per share recorded in the third quarter of 2015.

Net income (on a reported basis) amounted to a third-quarter record of $2.77 billion or $1.76 per share, more than double of $1.36 billion or 84 cents per share in the year-ago quarter.

Revenues in the reported quarter were a record $42.8 billion, 10.3% higher than $38.8 billion in the year-ago quarter. Revenues surpassed the Zacks Consensus Estimate of $40.09 billion.

 

 

Worldwide wholesale unit sales went up to 1.58 million vehicles from 1.50 million vehicles in the third quarter of 2015. Worldwide retail unit sales inched up to 2.39 million vehicles from 2.38 million vehicles in the year-ago quarter. The automaker’s global market share was 10.7% during the reported quarter, down from 11.1% in the year-ago quarter.

Adjusted earnings before interest and tax (EBIT) increased to a third-quarter record of $3.5 billion (8.3% of sales) from $3.1 billion (8%) in third-quarter 2015.

GENERAL MOTORS Price, Consensus and EPS Surprise

 

GENERAL MOTORS Price, Consensus and EPS Surprise | GENERAL MOTORS Quote

Segment Results

GM North America (“GMNA”) reported an 11.8% rise in revenues to $31.08 billion during third-quarter 2016. Adjusted EBIT improved to a third-quarter record of $3.5 billion from $3.3 billion in the year-ago quarter.

GM Europe (“GME”) witnessed a 7.3% fall in revenues to $4.2 billion in the quarter. The segment reported an adjusted loss of $0.1 billion, narrower than a loss of $0.2 billion recorded in the year-ago quarter.

GM International Operations (“GMIO”) reported a 1.8% decline in revenues to $2.96 billion from $3.02 billion in the year-ago quarter. Adjusted EBIT was $0.3 billion, in line with the year-ago figure.

GM South America (“GMSA”) witnessed a 16.7% surge in revenues to $2.03 billion. The segment reported an adjusted loss of $0.1 billion, narrower than a loss of $0.2 billion recorded in the year-ago quarter. The improvement was due to cost actions and better volumes in Brazil and Argentina.

GM Financial reported an impressive 46.6% rise in revenues to a record $2.5 billion during the quarter. The segment’s EBIT was $0.2 billion, in line with the year-ago quarter.

Financial Position

General Motors had cash and cash equivalents of $15.9 billion as of Sep 30, 2016 compared with $15.2 billion as of Dec 31, 2015. Total debt (Automotive and Financial) increased to $79.1 billion as of Sep 30, 2016, from $63.1 billion as of Dec 31, 2015.

During the first nine months of 2016, net cash from operating activities was $12.5 billion compared with $9.5 billion in the comparable year-ago period. Capital expenditures amounted to $6.84 billion in the first nine months of 2016, compared with $5.26 billion in the same period a year ago.

2016 Outlook

Based on the strong expectations for the second half of 2016, General Motors projects full-year adjusted earnings per share to be close to the upper end of its guidance range of $5.50–$6.00. The outlook is significantly higher than earnings of $5.02 per share recorded in 2015.

Zacks Rank

General Motors currently carries a Zacks Rank #3 (Hold).

Some better-ranked auto stocks include The Goodyear Tire & Rubber Company GT, Tata Motors Limited TTM and SORL Auto Parts, Inc. SORL.

Goodyear posted positive earnings surprises in the last four quarters, with an average beat of 10.28%.The company sports a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here

Tata Motors has a long-term expected growth rate of 3.6%. The Indian automaker also sports a Zacks Rank #1.

SORL Motor Parts, a Zacks Rank #2 (Buy) stock, has posted an average positive earnings surprise of 7.46% over the last four quarters.

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