General Motors


GM

is slated to release third-quarter 2020 results on Nov 5, before market open. The Zacks Consensus Estimate for the quarter’s earnings is pegged at $1.47 per share on revenues of $38.02 billion.

The auto giant posted a narrower-than-estimated loss in the last reported quarter on solid revenues in the North American and International segments.

General Motors surpassed estimates in each of the trailing four quarters, the average surprise being 126.65%. This is depicted in the graph below:

Which Way are the Estimates Headed?

The Zacks Consensus Estimate for General Motors’ third-quarter earnings per share has been unrevised at $1.47 over the past week. This compares unfavorably with the year-ago quarter’s earnings per share of $1.72. However, the Zacks Consensus Estimate for revenues suggests a year-over-year rise of 7.18%.

Earnings Whispers

Our proven model predicts an earnings beat for General Motors this time around. The combination of a positive

Earnings ESP

and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This has been elaborated below.

Earnings ESP

: General Motors has an Earnings ESP of +1.25%. This is because the Most Accurate Estimate is pegged a cent higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our

Earnings ESP Filter

.

Zacks Rank

: General Motors currently carries a Zacks Rank of 3. You can see


the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

With the economy gradually recovering from the coronavirus crisis, strengthening retail sales are driving the auto industry. While the economy witnessed considerable recovery in the third quarter, auto sales have been even more buoyant, with consumers considering private transportation much safer than shared services. General Motors is expected to have registered a boost in quarterly sales and earnings amid this improving scenario.

General Motors’ customer deliveries in the United States in the quarter under review jumped 35% from the second quarter to 665,192 vehicles, as all-new crossover and SUV deliveries continued to gain sales momentum.

With China being the first country to recover from the coronavirus mayhem, vehicle sales in the nation recorded robust growth during the quarter in discussion. In fact, General Motors delivered more than 771,400 vehicles in China during the July-September period, up 12% year on year and 8.1% sequentially.

Further, the Zacks Consensus Estimate for the company’s Automotive segment’s net sales is pegged at $32,336 million for the September-end quarter, suggesting an increase from the $31,817 million reported in the year-ago period. It also indicates a jump from the $13,361 recorded in the second quarter of 2020.

The consensus estimate for net sales in the North American market is pinned at $29,023 million for the to-be-reported quarter, calling for an increase from the prior-year period’s $27,971 million and the second quarter’s $11,064 million.

The consensus mark for the International segment’s quarterly net sales is pegged at $3,261 million, indicating a rise from the prior quarter’s $1,677 million. Moreover, the Zacks Consensus Estimate for the Financial segment’s third-quarter net sales is $3,604 million, suggesting an increase from the $3,423 million reported in the June-end quarter.

To conclude with, we remain optimistic that General Motors is well positioned for an earnings beat this season, supported by rising vehicle deliveries amid a rebounding customer demand. Remarkably, General Motors’ peers —

Tesla


TSLA

,

Fiat Chrysler Automobiles


FCAU

and

Ford Motor Company


F

— have topped consensus estimates in the third quarter.

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