Categories AlphaGraphs, Earnings, LATEST

GM stock falls after guidance cut; Q2 earnings beat estimates

General Motors shares plunged Wednesday after the company lowered its full-year earnings guidance to reflect higher commodity prices, mainly owing to the tariffs imposed by the government on metal imports. In the second quarter, adjusted earnings declined, but came in above analysts’ estimates.

Earnings, excluding special items, dropped to $1.81 per share from $1.89 per share in the same period last year. The bottom line was impacted by foreign currency devaluations and higher commodity costs. Analysts were looking for a bigger decline. Reported net income was $2.38 billion or $1.66 per share, compared to $1.66 billion or $1.09 per share recorded last year

General Motors second quarter 2018 earnings
General Motors Company Q2 2018 Earnings Infographic

Revenues declined modestly to $36.76 billion during the three-month period. The strong performance by GM Financial was partially offset by unfavorable pricing and product mix in the auto division.

The Detroit, Michigan-based company revised down its 2018 guidance citing cost and currency-related headwinds. Full-year earnings are currently estimated to be $5.14 per share, while adjusted earnings are forecast for be $6 per share. The current estimate for auto operating cash flow is $11.5 billion.

RELATED: GM mulls IPO for Cruise 

GM delivered a total of about 2.1 million vehicles globally during the June-quarter, broadly matching the numbers seen in the second quarter of 2017. The high demand for the company’s SUVs and trucks pushed up its US market share to 16.5%. While the Americas continued to witness demand growth, shipments to the other leading markets declined.

Taking forward its autonomous vehicle initiative, the company invested $1.1 billion in GM Cruise during the second quarter, amidst plans to spin off the driverless car division.

RELATED: GM boosts EV project in China

“We faced significant external challenges, but delivered solid results this quarter. The fundamentals of our business are strong and we remain focused on our plan – delivering great vehicles, developing technologies to transform personal mobility and creating long-term shareholder value,” said CEO Mary Barra.

RELATED: GM Q2 2018 earnings call transcript

Among the other automotive manufactures, Ford Motor (F) will be announcing its second quarter results today after the market closes.

GM shares fell more than 5% in premarket trading following the earnings announcement. The stock had gained more than 10% over the past 12 months, and closed the last trading session slightly higher.

RELATED: GM Q1 earnings beat


Most Popular

Cost reduction has become a priority for FedEx (FDX) after a challenging quarter

Shares of FedEx Corporation (NYSE: FDX) were up 1% on Tuesday. The stock has dropped 44% year-to-date and 34% over the past 12 months. The company delivered mixed results for

Prime Medicine is the next big biotech to pursue IPO. Here’s all you need to know

After a soft start to the year, the IPO market has witnessed muted activity so far though a few big companies entered the stock market. On the heels of AIG

Stock Watch: Is Darden Restaurants a good buy after earnings?

After a prolonged slowdown, the restaurant industry is returning to normal patterns but macroeconomic uncertainties and high inflation are currently playing spoilsport for it. While the pandemic-related slump forced many


Add Comment
Viewing Highlight