General Motors
GM
reported fourth-quarter 2021 adjusted earnings of $1.35 per share, topping the Zacks Consensus Estimate of $1.15. Better-than-expected profits from its North America and Financial segments drove this outperformance. The bottom line, however, compares unfavorably with year-ago quarter’s earnings of $1.93 per share.
Revenues of $33,584 million also surpassed the Zacks Consensus Estimate of $29,221 million. The top line compares unfavorably with the year-ago figure of $37,518 million. The company recorded adjusted earnings before interest and taxes (EBIT) of $2,839 million, lower than $3,712 million in the prior-year quarter. This downside resulted from the semiconductor headwinds faced by GM and rising commodity and logistics costs, partially offset by strong pricing on full-size pickups and full-size SUVs
The automaker’s market share in the GM market was 8.9% in the reported quarter, down from the year-ago quarter’s 10.9%.
Segmental Performance
GM North America (GMNA) generated fourth-quarter net revenues of $26,865 million, down from the $30,170 million recorded in the corresponding period of 2020. Nonetheless, revenues from the unit outpaced the Zacks Consensus Estimate of $24,931 million. The region’s wholesale vehicle sales of 579,000 units declined from the 802,000 units reported in the year-ago quarter but topped the consensus mark of 574,000 units. The segment’s operating profit came in at $2,165 million, lower than the $2,612 million witnessed in the year-earlier period. However, the segmental profit topped the consensus mark of $1,836 million.
GM International’s (GMI) net revenues in the reported quarter came in at $3,451 million, down from the year-ago quarter’s $3,894 million. The reported metric also missed the consensus mark of $4,208 million. The segment’s wholesale vehicle sales of 163,000 units declined from 216,000 units reported in the year-ago quarter and missed the consensus mark of 180,000 units. The unit reported an operating profit of $275 million, lower than the year-ago profit of $283 million. It missed the consensus mark of $363 million.
GM Financial generated net revenues of $3,232 million in the December quarter, down from $3,426 million recorded in the year-ago period and missed the consensus mark of $3,398 million. Also, the segment recorded an operating profit of $1,180 million, up from $1,039 million and beat the consensus mark of $905 million.
GM Cruise witnessed net revenues of $25 million in the fourth quarter, marginally up from $24 million reported in the year-earlier period and matched the consensus mark. The segment posted an operating loss of $349 million, wider than the $260 million loss reported in the prior-year quarter. The loss was also wider than the consensus mark of a loss of $313 million.
Financial Position
General Motors had cash and cash equivalents of $20,067 million as of Dec 31, 2021, compared with $19,992 million at the end of 2020. The long-term automotive debt at the end of the quarter was $16.4 billion compared with $16.2 billion as of Dec 31, 2020.
General Motors’ automotive cash provided by operating activities amounted to $9,384 million at the end of the reported quarter, a significant rise from $5,243 million in the prior-year period. The company recorded adjusted automotive free cash flow of $6,403 million in fourth-quarter 2021, increasing from $3,433 million.
2022 Guidance
For 2022, the company expects full-year net income to be in a range of $9.4-$10.8 billion and adjusted EBIT forecast to be in a range of $13.0 billion to $15.0 billion, taking into consideration continued steady demand for new vehicles and no significant new economic or supply chain challenges.
Zacks Rank & Other Key Picks
Currently, General Motors sports a Zacks Rank #1 (Strong Buy).
Other top players in the auto space include
Good Year
GT
and
Tesla
TSLA
, each sporting a Zacks Rank #1, and
Genuine Parts
GPC
, carrying a Zacks Rank #2 (Buy) currently. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Good Year has an expected earnings growth rate of 51.7% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 1.1% upward over the past 60 days.
Good Year’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GT pulled off a trailing four-quarter earnings surprise of 228.5%, on average. The stock has also rallied 92% over a year.
Tesla has an expected earnings growth rate of 35.21% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 5% upward over the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 25.38%, on average. The stock has also rallied 0.7% over a year.
Genuine Parts has an expected earnings growth rate of 10.03% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised around 2.2% upward over the past 60 days.
Genuine Parts’ earnings beat the Zacks Consensus Estimate in all the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of 16%, on average. Its shares have gained 37.6% over a year.
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