Despite Softening Sales General Motors Protects Bottom Line to Beat Estimates
Tuesday brought investors the first of the Detroit automakers' second-quarter earnings with General Motors (NYSE: GM) managing to beat analyst estimates on the bottom line, despite a weaker top line. As new light-vehicle sales in the U.S. peak, it's been critical for automakers to offset declining sales with pricing and incentive discipline, and that's exactly what GM has done during the second quarter. Here are the key figures and highlights.
Starting from the top, GM's net revenue checked in a little soft with a 1.1% decline to $37 billion, compared to the prior year, below analysts' estimates calling for $40.15 billion. Adjusted for special items, which include charges associated with the sale of its European operations, EBIT-adjusted margins checked in at 10%, which is a very healthy level for global automakers. EBIT-adjusted earnings checked in with a 4.3% decline to $3.7 billion, but adjusted earnings per share jumped 5.6% to $1.89, well above analysts' estimates calling for $1.69 per share.
"Disciplined and relentless focus on improving our business performance led to a strong quarter and very solid first half of the year," CEO Mary Barra said in a statement. "We will continue transforming GM to capitalize on growth opportunities and deliver even more value for our shareholders."
Source: Fool.com
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