GM beat estimates despite a dip in sales…
General Motors released its Q2 earnings report yesterday, the results came as a welcome surprise to investors. Despite lower sales in China, GM was able to surpass analyst expectations for sales and revenue in the company’s most recent fiscal quarter.
The company’s adjusted earnings per share came in at $1.64, edging out Refinitiv’s estimate of $1.44. GM also topped revenue estimates by bringing in $36.1 billion. These numbers drove a 2.6% increase in the company’s stock price on Thursday.
Mary Barra, GM CEO and Chairman, stated, “Our results demonstrate the earnings power of our full-size truck franchise, with more upside to come. We will continue operating our business with discipline, and the vision needed to deliver a stronger future for our employees, customers and shareholders.”
Taking a Closer Look
General Motors’ isn’t all good, but the company’s earnings report has managed to offset some concerns regarding the challenges it’s currently facing.
Here are a few key details from GM’s Q2 earnings report:
- EPS-diluted of $1.66 and EPS-diluted-adjusted of $1.64, includes $(0.01) from Lyft and PSA revaluation
- Income of $2.4 billion, up 1.6% year over year
- Revenue of $36.1 billion
- GM North America EBIT-adjusted of $3.0 billion
- GM Financial EBT-adjusted of $0.5 billion
GM also delivered 747,000 vehicles in the United States. This was led by crossover sales, which increased by 17% year-over-year. This is contrasted by 754,000 vehicle sales in China, which is 100,000 less than last year’s second quarter.
GM also declared its Q3 2019 dividend on Wednesday. Set at $0.38 per outstanding share of common stock, this dividend is payable Friday, September 20, 2019, to all common shareholders of record at the close of business on Friday, September 6, 2019.
GM Still Faces Challenges
GM is struggling to match its record sales numbers in 2019. According to the earnings report, income from China has dropped from $592 million in Q2 2018 to $235 million in this recent fiscal quarter.
CFO Dhivya Suryadevara told CNBC, “We do expect China to be down year over year.”
Despite these lower figures, GM has managed to beat earnings expectations due to the more profitable sales of its pick-up trucks and crossovers. The company also expects its new Corvette to be a big hit going forward. GM is increasing production of the recently announced vehicle in anticipation of strong customer demand.
GM also announced investments at its Fort Wayne, Flint, and Arlington plants to expand production for its full-size truck and SUV facilities, bringing investment totals to more than $4.2 billion to prepare for its next-generation truck launches.
While GM has had trouble matching its sales records from the previous year, the company’s shares have increased by more than 21% since the start of the year.
