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Why Is General Motors (GM) Up 0.2% Since Last Earnings Report?
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A month has gone by since the last earnings report for General Motors (GM - Free Report) . Shares have added about 0.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is General Motors due for a pullback? 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 Top Estimates
General Motors reported second-quarter 2024 adjusted earnings of $3.06 per share, which surpassed the Zacks Consensus Estimate of $2.67. The bottom line also increased from the year-ago quarter’s level of $1.91. Solid results from the GMNA segment led to the outperformance. Revenues of $47.97 billion beat the Zacks Consensus Estimate of $44.94 billion and increased from $44.75 billion recorded in the year-ago period.
The U.S. auto giant recorded adjusted earnings before interest and taxes (EBIT) of $4.4 billion, higher than $3.2 billion in the prior-year quarter. The automaker’s share in the GM market was 8.4% in the reported quarter compared with 9.1% in the year-ago quarter.
Segmental Performance
GM North America (“GMNA”) generated net revenues of $40.7 billion, up from $37.2 billion recorded in the corresponding period of 2023. The figure also outpaced our model projection of $37.5 billion on higher-than-expected deliveries. Wholesale vehicle sales in the GMNA unit totaled 903,000 units, up from 833,000 units reported in the year-ago quarter. The figure also surpassed our estimate of 845,000 units. The segment’s operating profit totaled $4.43 billion, up from $3.19 billion recorded in the year-earlier period. The metric also exceeded our estimate of $3.37 billion.
GM International's (“GMI”) net revenues in the reported quarter amounted to $3.3 billion, down from the year-ago quarter’s $3.95 billion. The metric also missed our estimate of $3.67 billion. The segment’s wholesale vehicle sales of 140,000 units decreased from 147,000 units in the year-ago quarter. GMI reported an operating profit of $50 million, lower than the profit of $236 million generated in the year-ago period. Our estimate was an operating profit of $147 million.
GM Financial generated net revenues of $3.92 billion in the quarter, up from $3.5 billion recorded in the year-ago period and ahead of our prediction of $3.55 billion. The segment recorded an EBIT-adjusted operating profit of $822 million, up from $766 million recorded in the year-ago period. The metric surpassed our prediction of $689 million.
GM Cruise recorded net revenues of $25 million in the second quarter compared with $26 million recorded in the corresponding quarter of 2023. The metric came in line with our projection. The segment posted an operating loss of $458 million, narrower than a loss of $611 million reported in the prior-year quarter. The reported loss was, however, wider than our estimate of a loss of $432 million.
Financial Position
General Motors had cash and cash equivalents of $22.5 billion as of Jun 30, 2024. The long-term automotive debt at the end of the quarter was $15.4 billion. Net automotive cash provided by operating activities amounted to $7.7 billion during the quarter under review. The company recorded an adjusted automotive free cash flow of $5.3 billion in the second quarter of 2024.
GM declared its third-quarter dividend of 12 cents per share. The dividend will be paid out on Sep 19 to shareholders of record as of Sep 6, 2024.
2024 Guidance Raised
For full-year 2024, GM now expects adjusted EBIT in the range of $13-$15 billion, up from $12.5-$14.5 billion guided earlier. Adjusted EPS is anticipated in the range of $9.5-$10.5, up from $9-$10, guided earlier. Adjusted automotive free cash flow is expected in the band of $9.5-$11.5 billion, higher than the prior forecast of $8.5-$10.5 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, General Motors 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.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise General Motors has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is General Motors (GM) Up 0.2% Since Last Earnings Report?
A month has gone by since the last earnings report for General Motors (GM - Free Report) . Shares have added about 0.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is General Motors due for a pullback? 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 Top Estimates
General Motors reported second-quarter 2024 adjusted earnings of $3.06 per share, which surpassed the Zacks Consensus Estimate of $2.67. The bottom line also increased from the year-ago quarter’s level of $1.91. Solid results from the GMNA segment led to the outperformance. Revenues of $47.97 billion beat the Zacks Consensus Estimate of $44.94 billion and increased from $44.75 billion recorded in the year-ago period.
The U.S. auto giant recorded adjusted earnings before interest and taxes (EBIT) of $4.4 billion, higher than $3.2 billion in the prior-year quarter. The automaker’s share in the GM market was 8.4% in the reported quarter compared with 9.1% in the year-ago quarter.
Segmental Performance
GM North America (“GMNA”) generated net revenues of $40.7 billion, up from $37.2 billion recorded in the corresponding period of 2023. The figure also outpaced our model projection of $37.5 billion on higher-than-expected deliveries. Wholesale vehicle sales in the GMNA unit totaled 903,000 units, up from 833,000 units reported in the year-ago quarter. The figure also surpassed our estimate of 845,000 units. The segment’s operating profit totaled $4.43 billion, up from $3.19 billion recorded in the year-earlier period. The metric also exceeded our estimate of $3.37 billion.
GM International's (“GMI”) net revenues in the reported quarter amounted to $3.3 billion, down from the year-ago quarter’s $3.95 billion. The metric also missed our estimate of $3.67 billion. The segment’s wholesale vehicle sales of 140,000 units decreased from 147,000 units in the year-ago quarter. GMI reported an operating profit of $50 million, lower than the profit of $236 million generated in the year-ago period. Our estimate was an operating profit of $147 million.
GM Financial generated net revenues of $3.92 billion in the quarter, up from $3.5 billion recorded in the year-ago period and ahead of our prediction of $3.55 billion. The segment recorded an EBIT-adjusted operating profit of $822 million, up from $766 million recorded in the year-ago period. The metric surpassed our prediction of $689 million.
GM Cruise recorded net revenues of $25 million in the second quarter compared with $26 million recorded in the corresponding quarter of 2023. The metric came in line with our projection. The segment posted an operating loss of $458 million, narrower than a loss of $611 million reported in the prior-year quarter. The reported loss was, however, wider than our estimate of a loss of $432 million.
Financial Position
General Motors had cash and cash equivalents of $22.5 billion as of Jun 30, 2024. The long-term automotive debt at the end of the quarter was $15.4 billion. Net automotive cash provided by operating activities amounted to $7.7 billion during the quarter under review. The company recorded an adjusted automotive free cash flow of $5.3 billion in the second quarter of 2024.
GM declared its third-quarter dividend of 12 cents per share. The dividend will be paid out on Sep 19 to shareholders of record as of Sep 6, 2024.
2024 Guidance Raised
For full-year 2024, GM now expects adjusted EBIT in the range of $13-$15 billion, up from $12.5-$14.5 billion guided earlier. Adjusted EPS is anticipated in the range of $9.5-$10.5, up from $9-$10, guided earlier. Adjusted automotive free cash flow is expected in the band of $9.5-$11.5 billion, higher than the prior forecast of $8.5-$10.5 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, General Motors 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.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise General Motors has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.