General Motors (GM, Financial) released its third-quarter results before the market opened on Oct. 29. The company beat Wall Street’s top and bottom-line expectations owing to high sales of full-size pickups as well as robust performance in North America.
By the numbers
For the third quarter, the company posted adjusted earnings of $1.72 per share, down 8% from the same period last year. Revenue amounted to $35.5 billion, down 0.9% from the previous year. Analysts had anticipated earnings of $1.31 per share on $33.82 billion in revenue.
Reflecting on the quarter’s performance, the company’s CFO Dhivya Suryadevara said:
Our underlying third-quarter performance demonstrates the ongoing resilience and earnings power of our company, building on our leading truck and crossover franchises, and transformational cost actions. Our focus going forward will continue to be the disciplined execution of our business plan.
At quarter-end, the company had cash and cash equivalents of $20.1 billion. Long-term debt came in at $13.1 billion.
Performance in North America and China
In North America, the company’s revenue was $27.9 billion. This was more than the $27.6 billion reported in the year-ago period. Strong sales of trucks and crossovers coupled with launch of new full-size pickup models helped the segment’s overall results during the quarter. Unfortunately, the company did experience productions stoppage in the US, which affected North America results. The work stoppage led to a loss of roughly 2 weeks of production.
Adjusted operating profit in North America was $3 billion, compared to revenue of $2.8 billion reported in the prior year. The growth in this metric was led by the company’s cost-saving initiatives.
The average industry vehicle sales in China plunged 11% in the reported quarter. General Motors’ performance in China lagged the overall industry’s performance. Cadillac was the segment’s bright spot, though, with quarterly sales increasing 11% on a year-over-year basis thanks to robust performance of the XT4 and XT5 models. Cadillac’s performance in China will be critical to the company’s success, especially with the upcoming launch of the XT6.
Financial forecast
The Detroit-based automaker projects full-year adjusted earnings per share to be between $4.50 and $4.80. While adjusted automotive free cash flow is estimated to be around $1 billion, capital spending is expected to be $7.5 billion.
Disclosure: I do not hold any positions in the stocks mentioned.
ead more here:
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