4 key takeaways from General Motors Q1 earnings report
- General Motors profit tops estimates by over 100% in the first quarter.
- The American multinational's revenue posts an unexpected decline.
- The U.S. carmaker gives slightly weaker than expected annual guidance.
General Motors Co. (NYSE: GM) said on Wednesday that its profit in the fiscal first quarter came in more than double the figure that analysts had anticipated. The American multinational, however, reported an unexpected decline in revenue. Its guidance for the full year also slightly weaker than Wall Street estimates.
1. Financial performance
General Motors said that its net income in the first quarter printed at £2.14 billion that translates to £1.46 per share. In the comparable quarter of last year, its net income was capped at a significantly lower £177.53 million, or 12.22 pence per share.
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Adjusted for one-time items, the car manufacturer earned £1.62 per share in Q1 versus the year-ago figure of 44.56 pence per share. General Motors generated £23.34 billion of revenue in the recent quarter that represents a 0.7% annualised decline.
According to FactSet, experts had forecast the company to post £23.72 billion of revenue in the first quarter. Their estimate for adjusted per-share earnings stood at a much lower 75 pence. In the prior quarter (Q4), General Motors’ revenue had jumped 22%.
2. Other notable figures
GM’s adjusted EBIT from North America and the International segment (including China) registered at £1.58 billion and £0.43 billion, respectively, in the first quarter. General Motor’s free cash flow stood at negative £1.37 billion in Q1 due to the global chip shortage that resulted in a delay in delivering roughly £5.75 billion worth of vehicles.
3. Guidance for the full financial year
For fiscal 2021, General Motors now forecasts its per-share earnings to fall in the range of £3.23 to £3.77 on an adjusted basis. Analysts, on the other hand, are calling for a higher £3.80 of adjusted EPS for GM this year. The automaker expects lower profitability in Q2 on a sequential basis.
4. CEO Mary Barra’s remarks
In a letter to shareholders, CEO Mary Barra said:
“We will continue to convert assembly plants to build EVs and expand our battery cell capacity as we make progress on our goal of EV market share leadership in North America,” Barra wrote. “We will lead the industry in safely commercializing self-driving technology.”
In separate news, Deutsche Post said on Wednesday that a global rise in eCommerce increased its profit and revenue in Q1.
Impact on the share price
General Motors shares were reported about 3% down in premarket trading on Wednesday. At the time of writing, GM has a market capitalisation of £57.72 billion and a price to earnings ratio of 12.77.