General Motors Co. GM recorded adjusted earnings of $1.50 per share in the third quarter of 2015, beating the Zacks Consensus Estimate of $1.17 by a wide margin. Earnings increased 55% from 97 cents per share recorded in the third quarter of 2014. The company recorded solid year-over-year improvement, based on solid performance in China and the U.S.
Adjusted results for the third quarter of 2015 exclude an unfavorable impact of $1.5 billion or 66 cents per share. A $0.9 billion reduction in net income was attributable to the Deferred Prosecution Agreement reached with the U.S. Attorney’s Office, related to the ignition switch recall, and $0.6 billion for the settlement of certain civil actions associated with 2014 product recalls, including the ignition switch recall. In comparison, adjusted results for the third quarter of 2014 exclude the unfavorable impact of $0.3 billion or 16 cents per share related to flood damage at the General Motors Technical Center in Michigan, and long-lived asset impairments in Russia.
Net income (on a reported basis) amounted to $1.4 billion or 84 cents per share, compared with $1.4 billion or 81 cents per share in the year-ago quarter.
Revenues in the reported quarter declined 1.3% year over year to $38.8 billion and marginally missed the Zacks Consensus Estimate of $39.1 billion. The year-over-year decline in revenues was due to the adverse impact of foreign currency translation.
Worldwide wholesale unit sales went up to 1.50 million vehicles in the quarter. Worldwide retail unit sales dropped to 2.37 million vehicles from 2.45 million vehicles in the year-ago quarter. The automaker’s global market share was 11.2% during the reported quarter, down from 11.6% in the year-ago quarter.
Adjusted earnings before interest and tax (EBIT) increased to $3.1 billion (8% of sales) from $2.3 billion (5.8%) in the third quarter of 2014. Operating profit amounted to $997 million, compared with $1.3 billion a year ago.
Segment Results
GM North America (“GMNA”) reported a 7.7% rise in revenues to $27.8 billion during third-quarter 2015. Adjusted EBIT improved to $3.3 billion from $2.5 billion in the third quarter of 2014.
GM Europe (“GME”) witnessed a 12.8% decrease in revenues to $4.6 billion in the quarter. The region reported a loss of $0.2 billion compared with a loss of $0.4 billion in the year-ago quarter.
GM International Operations (“GMIO”) reported an 18.8% decline in revenues to $3 billion from $3.7 billion in the year-ago quarter. Adjusted EBIT was $0.3 billion, in line with the prior-year quarter.
GM South America (“GMSA”) witnessed a 45.7% fall in revenues to $1.7 billion. The segment reported an adjusted loss of $0.2 billion in the quarter, compared with breakeven results in the year-ago quarter.
GM Financial reported an impressive 35.4% rise in revenues to $1.7 billion during the quarter. EBIT in the segment was $0.2 billion, in line with the prior-year quarter.
Financial Position
General Motors had cash and cash equivalents of $15.4 billion as of Sep 30, 2015 compared with $18.9 billion as of Dec 31, 2014. Total debt (Automotive and Financial) increased to $57.4 billion as of Sep 30, 2015 from $46.8 billion as of Dec 31, 2014.
During the first nine months of 2015, the company had net cash flow of $9.5 billion from operating activities, up from $6.9 billion in the comparable year-ago period. Capital expenditures amounted to $5.3 billion in the first nine months 2015, compared with $5.1 billion in the same period a year ago.
Financial Update
Year to date through Oct 19, 2015, General Motors returned above $4.6 billion to shareholders by repurchasing shares worth $2.9 billion and paying dividends of $1.6 billion.
Zacks Rank
General Motors currently carries a Zacks Rank #3 (Hold).
Some better-ranked automobile stocks include Penske Automotive Group, Inc. PAG, U.S. Auto Parts Network, Inc. PRTS and Superior Industries International, Inc. SUP, all carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment