General Motors (GM) Q2 Earnings Beat Estimates, Down Y/Y

General Motors Company GM reported adjusted earnings of $1.64 per share in second-quarter 2019, down 9.4% from the prior-year quarter. However, its earnings beat the Zacks Consensus Estimate of $1.43.

In the quarter, the sale of Chevrolet Silverado and GMC Sierra light-duty crew cabs grew year over year in double digits. This was the second consecutive quarter of witnessing growth for the same. This is in sync with the automaker’s strategy to launch high-content, high-margin trucks.

General Motors reported revenues of $36.1 billion, down 1.9% from the year-ago quarter. However, revenues beat the Zacks Consensus Estimate of $35.6 billion.

In the reported quarter, total sales for the wholesale unit declined to 1.13 million from 1.2 million in the second quarter of 2018. Worldwide retail units sold declined to 1.94 million from 2.07 million in the year-ago quarter.

The automaker’s global market share was 10.7% in the reported quarter, reflecting a decline from 11.1% in the year-ago quarter.

Segment Results

GM North America generated net sales and revenues of $28.3 billion in the second quarter of 2019, down from $28.5 billion recorded in second-quarter 2018.

GM International’s net sales and revenues were $4.05 billion, declining from $4.76 billion in the year-ago quarter.

GM Financial generated net sales and revenues of $3.64 billion in the quarter under review, reflecting rise from $3.49 billion recorded in the year-ago quarter.

Financial Position

General Motors had cash and cash equivalents of $17.1 billion as of Jun 30, 2019, compared with $20.8 billion as of Dec 31, 2018.

Adjusted automotive free cash flow in the reported quarter was $2.53 billion versus $2.6 billion used in the prior-year quarter.

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

Some better-ranked stocks in the auto space are Copart, Inc. CPRT, CarMax, Inc. KMX and Gentex Corporation GNTX. While Copart currently sports a Zacks Rank #1 (Strong Buy), CarMax and Gentex carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Copart has an expected long-term growth rate of 20%. In the past year, shares of the company have rallied 34.7%.

CarMax has an expected long-term growth rate of 12.6%. In the past year, shares of the company have moved up 19.9%.

Gentex has an expected long-term growth rate of 5%. In the past year, shares of the company have returned 20.9%.

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