What To Expect From General Motors’ Q1 Earnings

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General Motors (NYSE: GM) will release its first-quarter 2018 results and conduct a conference call with analysts on 26th April 2018. Average consensus market estimates expect the company to report a revenue of  $34.6 billion and adj-EPS of $1.28, representing an 8% and 22% decline quarter-on-quarter (q-o-q), respectively. Lower expected revenue is reflective of lower sequential sales volume reported by the company due to the continued headwinds faced by the company in the U.S. automobile market.

General Motors has reported stronger quarter sales volume in the U.S. in Q1 in comparison to the same period last year. However, sales volume has been lower sequentially, which would reflect as a lower sequential revenue number for the company in its upcoming results. The company’s year-to-date (YTD) U.S. total sales volume increased by ~4% year-on-year (y-o-y), with a material volume increase experienced in March. The company benefited from a stronger U.S. economy, with consumers taking benefit of lower borrowing rates ahead of anticipated interest rate hikes through the rest of the year. Additionally, the company’s sales volume benefited from a better product mix offering, with an increased effort made by the company to cater to the changing U.S. consumer demand for SUVs and crossovers. Increase in sales of more profitable SUVs and trucks is also expected to result in higher average price realization for its U.S. automobile sales volume.

General Motors in its latest sales report notified investors that it would no longer be reporting monthly sales figures, in an effort to reduce short-term volatility in the reported numbers. This reporting transition is expected to lead to greater uncertainty with respect to quarterly figures among investors and make other automobile competitors (reporting monthly data) more appealing to the market. We wait to see if other automobile giants also follow suit reflecting General Motors’ reasoning. We have outlined our expectation for the company’s 2018 results using our interactive dashboard. You can make changes to our assumptions to arrive at your own fair price estimate forecast for the company.

 

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