General Motors Reported $1.39 EPS Beating Analyst’s Estimates

04 Feb

GM stock, General Motor Corporation, General Motors

The automaker has a fairly good year in a number of fronts including North America and China; however South America was a tough cookie to crumble.

In 2015, General Motors Corporation literally rode sales of its SUVs as well as trucks in the American market as it reported an upbeat financial earnings result for the fourth quarter.

The Street has estimated that the revenue generation for the year would amount to $39.03 billion while the auto-maker posted revenue of $39.6 billion in total; additionally a year earlier the revenue was around $39.62 billion. The earnings per share for the quarter that were reported also outperformed the analyst’s expectations by as much as $0.19 since the company posted EPS of $1.39 while the experts had predicted it to be $1.21.

In the fourth quarter, the number 1 automaker in the United States generated revenue of $2.8 billion before taxes and interest. From the same quarter in the previous year, there has been a jump of at least 600 million. The adjusted earnings before interest and tax were $0.4 billion for the international operations – which were in line with the earnings reported back in 2014.

Additionally, Chuck Stevens, the Vice President and CFO of GM stated during the earnings call that for the current year, the company plans to improve the financial results with the help of vehicle launch cadence, simultaneously working on its other businesses and furthermore focusing on efficiency in its operations.

However these impressive results are generated from the North American market, on the other hand the Chinese market paint a different picture – similar but different. In the previous year, the automobile market in the world’s country slowed down significantly. However, General Motors was able to adapt to that change as it introduced its latest crossover SUVs which include Baojun 560 and Buick Envision. These two automobile managed to outperform in the market and were a big hit in China.

In equity it earned $579 million income during the fourth quarter suggesting an increase of 12% from a year earlier. During the previous year, the Buick Envision was a major hit in the Chinese market; due to that success in the region it has decided to bring the new SUV model in the United States as well. It plans to do so later this year.

Furthermore, the places that have found to be different for the company were Europe and South America. These countries have been quite challenging for the automaker as in Europe, General Motor lost $298 million during the quarter. In comparison to a year ago, the company managed to improve by $95 million.

On the other hand, South America has been quite challenging for the auto-maker as well; but it is not the only automobile manufacturer in the region that has suffered, due to the recessions in the key market other rivals such as Ford Motors has incurred losses too. GM however has incurred a loss of $47 million during the fourth quarter in the market while it reported a profit of $119 million a year earlier. The company explained this drop in numbers by the swing in the exchange rates as well as the ‘lower industry wide sales volume’.

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Posted by on February 4, 2016 in Finance News


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