A month has gone by since the last earnings report for General Motors Company (GM). 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 Company 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 catalysts.
General Motors Q1 Earnings Top Estimates
General Motors reported first-quarter 2023 adjusted earnings of $2.21 per share, surpassing the Zacks Consensus Estimate of $1.64. Higher-than-expected operating profit from GMNA, GMI and Financial segments led to the outperformance. The bottom line also rose from the year-ago quarter’s earnings of $2.09 per share.
Revenues of $39,985 million beat the Zacks Consensus Estimate of $38,677.9 million and increased from $35,979 million recorded in the year-ago period. However, the company recorded adjusted EBIT of $3,803 million, lower than $4,044 million in the prior-year quarter.
The automaker’s share in the GM market was 8.6% in the reported quarter, down from the year-ago quarter’s 9%.
GMNA generated first-quarter net revenues of $32,889 million, up from $29,456 million recorded in the corresponding period of 2022. Also, revenues from the unit outpaced the Zacks Consensus Estimate of $31,556 million. The region’s wholesale vehicle sales of 723,000 units increased from 694,000 units reported in the year-ago quarter. The segment’s operating profit came in at $3,576 million, increasing from $3,141 million witnessed in the year-earlier period. The segmental profit also beat the consensus mark of $2,799 million.
GMI net revenues in the reported quarter came in at $3,727 million, up from the year-ago quarter’s $3,313 million. The metric, however, fell short of the consensus mark of $3,965 million. The segment’s wholesale vehicle sales of 141,000 units increased from 137,000 units in the year-ago quarter. The unit reported an operating profit of $347 million, increasing from the year-ago profit of $328 million. The metric also crossed the consensus mark of $270 million.
GM Financial generated net revenues of $3,343 million in the quarter, up from $3,156 million recorded in the year-ago period and came ahead of the consensus mark of $3,140 million. The segment recorded an EBIT-adjusted operating profit of $771 million, down from $1,284 but topping the consensus mark of $681 million.
GM Cruise recorded net revenues of $25 million in the first quarter, inching down from $26 million recorded in the prior-year quarter and missed the consensus mark of $38.5 million. The segment posted an operating loss of $561 million, wider than a loss of $325 million reported in the prior-year quarter. The reported loss also came in wider than the consensus mark of a loss of $534 million.
General Motors had cash and cash equivalents of $18,227 million as of Mar 31, 2023, compared with $19,153 million as of Dec 31, 2022. The long-term automotive debt at the end of the quarter was $15,929 million compared with $15,885 million as of Dec 31, 2022.
General Motors’ net automotive cash provided by operating activities amounted to $2,232 million during the quarter under review. The company recorded an adjusted automotive free cash flow of negative $132 million in first-quarter 2023 against $6 million recorded in the year-ago period.
2023 Guidance Updated
For 2023, General Motors’ full-year net income is estimated in the band of $8.4-$9.9 million, down from the previously guided $8.7-$10.1 billion range. The adjusted EBIT forecast was revised upward to $11-$13 billion from $10.5-$12.5 billion guided before. Adjusted EPS is expected in the band of $6.35-$7.35 a share, up from the prior forecast of $6-$7. Adjusted automotive free cash flow is envisioned between $5.5 billion and $7.5 billion, up from the previous projection of $5-$7 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 6.31% due to these changes.
At this time, General Motors Company has a subpar Growth Score of D, though it is lagging a bit 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise General Motors Company has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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