What To Expect From General Motors’ Q3 2017 Earnings

by Trefis Team
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General Motors (NYSE:GM) will announce its Q3 2017 earnings on October 24th 2017 and after reporting strong sales in August and September, this is likely to be a bright quarter for the company. Below is a summary of consensus analyst estimates for the company for Q3 2017:

Source: Yahoo Finance

As sales of passenger cars in the U.S. slow down, General Motors is likely to continue witnessing a decline in its revenues and EPS (earnings per share). International markets, especially China, are likely to be the key growth drivers for the company and General Motors is restructuring its operations in these markets to improve profitability.

Key Trends:

Crossovers Likely To Drive Growth In the U.S. : General Motors reported a 7.5% increase in sales in the U.S. in August 2017 driven primarily by the sale of crossovers. The company is launching four more crossovers in the second half of 2017 which would drive revenues for the remainder of the year. (Read Strong August Sales Put General Motors Back On Track). Sales in September increased by 12% year on year. This was again driven by crossovers which witnessed a 43% increase in deliveries for this month.

Recovery Efforts After Recent Hurricanes Can Drive Sales In The Short Term: As two main regions in the U.S. — Florida and Texas — recover from the recent hurricanes (Harvey and Irma), rebuilding efforts can drive automobile sales.  Experts estimate that nearly 1 million cars were destroyed in these hurricanes and a spike a demand for SUV’s and trucks is likely as rebuilding efforts start.

Increased Focus On Electric Cars: General Motors  is working towards an “all electric” future and is likely to launch 20 new electric vehicles by 2023. This is aimed towards meeting regulatory requirements in various regions (especially China) and adapting towards changing customer needs. (Read A Closer Look At General Motors’ All Electric Future).

Strong Sales Growth In China: August was a strong month for General Motors in China and the company recorded a nearly 12% year on year increase in sales setting a sales record for the month. These sales were driven by its Chevrolet and luxury brand Cadillac. This trend continued in September where the company has recorded a nearly 7% year on year growth in sales.

We expect General Motors to report strong results in Q3 2017 on the back of positive sales numbers in both the U.S. and China.

 

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