General Motors
GM
put up a stellar show for fourth-quarter 2020, with earnings and sales not just topping estimates but also rising year over year. The U.S. auto giant reported adjusted earnings of $1.93 per share for fourth-quarter 2020, surpassing the Zacks Consensus Estimate of $1.62. Higher-than-anticipated revenues from its North America and International units drove this outperformance. Better-than-expected contribution from International and Financial units also aided the results. The bottom line was significantly higher than the year-ago earnings of 5 cents per share amid cost-containment efforts, and robust demand for SUVs as well as pickups.
Revenues of $37,518 million topped the Zacks Consensus Estimate of $36,899 million. Revenues also surged from the year-ago figure of $30,826 million. The company recorded adjusted EBIT of $3,712 million, significantly up from $105 million witnessed in the prior-year quarter. The upside can be attributed to launch of SUVs, effective pricing on pickups, strong used-car prices and non-recurrence of the 2019 strike.
Notably, the automaker’s market share in GM market was 11% for the reported quarter, marginally increasing from the year-ago period’s 10.9%.
General Motors Company Price, Consensus and EPS Surprise
General Motors Company price-consensus-eps-surprise-chart
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General Motors Company Quote
Segmental Performance
GM North America
(GMNA) generated fourth-quarter net revenues of $30,170 million, up from $22,706 million recorded in the corresponding period of 2019. Also, revenues from the unit outpaced the Zacks Consensus Estimate of $28,547 million. Wholesale vehicle sales in the region totaled 802,000 units, up from 684,000 units in the comparable year-ago quarter. The segment reported an operating profit of $2,612 million, jumping from the year-ago level of $263 million. The results improved primarily owing to continued cost-cut actions, newly launched full-size SUVs and high demand for pickup trucks.
GM International
’s (GMI) net revenues for the reported quarter were $3,894 million, down from the year-ago quarter’s $4,420 million on lower year-over-year vehicle sales. However, revenues from the segment topped the Zacks Consensus Estimate of $3,555 million. The unit turned an operating profit of $283 million compared with the year-ago loss of $120 million and the consensus estimate of a loss of $54 million, owing to strong pricing, vehicle launches and benefits from cost-containment actions.
GM Financial
generated net revenues of $3,426 million for the December-end quarter, down from $3,636 million recorded in the year-ago period. The segment recorded an operating profit of $1,039 million, increasing from $498 million witnessed in the prior-year quarter and beating the consensus mark of $608 million. This upswing resulted from the positive impact of high used-vehicle prices, which in turn contributed to gains in the sale of off-lease vehicles, stable credit performance and reduced interest expense.
GM Cruise
witnessed net revenues of $24 million for the fourth quarter, down from $25 million reported in the year-earlier period. The segment posted an operating loss of $260 million, narrower than $305 million loss reported in the prior-year quarter.
GM Corporate
delivered net revenues of $29 million for the reported quarter, down from the year-ago period’s $68 million. However, the segment reported an operating income of $38 million against a loss of $231 million incurred in the year-ago quarter.
Financial Position
General Motors — which shares space with other auto biggies including
Ford
F
,
Tesla
TSLA
and
Volkswagen
VWAGY
— had cash and cash equivalents of $19.2 billion as of Dec 31, 2020 compared with $19.1 billion in the corresponding period of 2019. Long-term automotive debt stands at $16.2 billion compared with $12.5 billion as of Dec 31, 2019.
General Motors’ automotive liquidity amounted to $40.5 billion at the end of the October-December quarter. The company recorded adjusted automotive free cash flow (FCF) of $3.4 billion for fourth-quarter 2020 against negative FCF of $1.3 billion witnessed in the prior-year period.
2021 View
The Zacks Rank #3 (Hold) company expects 2021 adjusted EBIT and EPS per share in the band of $10-$11 billion and $4.5-$5.25, respectively. Adjusted automotive FCF is envisioned between $1 billion and $2 billion. You can see
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