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General Motors (GM) Q1 Earnings Top Estimates, ’22 EPS View Up

General Motors GM reported first-quarter 2022 adjusted earnings of $2.09 per share, topping the Zacks Consensus Estimate of $1.56. Better-than-expected contributions from North America, International and Financial segments drove the outperformance. The bottom line, however, compares unfavorably with the year-ago quarter’s earnings of $2.25 per share.

Revenues of $35,979 million missed the Zacks Consensus Estimate of $36,252.5 million. The top line compares favorably with the year-ago figure of $32,474 million. The company recorded adjusted earnings before interest and taxes (EBIT) of $4,044 million, lower than $4,417 million in the prior-year quarter.

The automaker’s share in the GM market was 9.1% in the reported quarter, slightly down from the year-ago quarter’s 9.9%.

General Motors Company Price, Consensus and EPS Surprise

General Motors Company Price, Consensus and EPS Surprise

General Motors Company Price, Consensus and EPS Surprise

General Motors Company price-consensus-eps-surprise-chart | General Motors Company Quote

Segmental Performance

GM North America (GMNA) generated first-quarter net revenues of $29,456 million, up from $25,957 million recorded in the corresponding period of 2021. Nonetheless, revenues from the unit lagged the Zacks Consensus Estimate of $34,263 million. The region’s wholesale vehicle sales of 694,000 units increased from 664,000 units reported in the year-ago quarter. The segment’s operating profit came in at $3,141 million, slightly higher than $3,134 million witnessed in the year-earlier period. The segmental profit also topped the consensus mark of $2,422 million.

GM International’s (GMI) net revenues in the reported quarter came in at $3,313 million, up from the year-ago quarter’s $3,086 million. The metric crossed the consensus mark of $3,209 million. The segment’s wholesale vehicle sales of 137,000 units declined from 157,000 units in the year-ago quarter. The unit reported an operating profit of $328 million, higher than the year-ago profit of $308 million. It missed the consensus mark of $348 million.

GM Financial generated net revenues of $3,156 million in the quarter, down from $3,407 million recorded in the year-ago period and missed the consensus mark of $3,355 million. Also, the segment recorded an EBIT-adjusted operating profit of $1,284 million, up from $1,182 million and beat the consensus mark of $850 million.

GM Cruise witnessed net revenues of $26 million in the first quarter, down from $30 million reported in the year-earlier period. The segment posted an operating loss of $325 million, wider than the $229 million loss reported in the prior-year quarter but narrower than the consensus mark of a loss of $335 million.

Financial Position

General Motors had cash and cash equivalents of $16,349 million as of Mar 31, 2022, compared with $20,067 million as of Dec 31, 2021. The long-term automotive debt at the end of the quarter was $16,155 million compared with $16,355 million as of Dec 31, 2021.

General Motors’ automotive cash provided by operating activities amounted to $1,635 million at the end of the reported quarter against $1,096 million of automotive cash used by operating activities in the prior-year period. The company recorded an adjusted automotive free cash flow of $6 million in first-quarter 2022 against a negative cash flow of $1,932 million in the year-ago period.

2022 Guidance

For 2022, the company expects full-year net income to be in a range of $9.6-$11.2 billion, higher than the previous range of $9.4-$10.8 billion. Adjusted EBIT forecast remains unchanged in the range of $13.0 billion to $15.0 billion. The estimate for adjusted EPS was increased from the previous range of $6.25-$7.25 to $6.5-$7.5.

Zacks Rank & Key Picks

GM currently carries a Zacks Rank #4 (Sell).

Better-ranked players in the auto space include BRP Group, Inc. DOOO, sporting a Zacks Rank #1 (Strong Buy) and Dorman Products DORM and Standard Motor Products SMP, each carrying a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

BRP Group has an expected earnings growth rate of 9.1% for fiscal 2023. The Zacks Consensus Estimate for current-year earnings has been revised around 7.9% upward in the past 60 days.

BRP Group’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. DOOO pulled off a trailing four-quarter earnings surprise of 68%, on average. The stock has declined 13.8% over the past year.

Dorman Products has an expected earnings growth rate of 18.32% for the current year. The Zacks Consensus Estimate for current-year earnings has been marginally revised 0.4% upwards in the past 60 days.

Dorman Products’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. DORM pulled off a trailing four-quarter earnings surprise of 3.1%, on average. The stock has lost 7.6% over the past year.

The Zacks Consensus Estimate for Standard Motor’s current-year earnings has been revised around 1.1% upward in the past 60 days.

Standard Motor’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. SMP pulled off a trailing four-quarter earnings surprise of 60.5%, on average. The stock has declined 3.3% over the past year.

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