General Motors Company (GM) Earnings Beat Estimates, Stock Jumps

General Motors Company (NYSE:GM) released its Q4 2017 earnings report before opening bell this morning. GM earnings came in at $1.65 per share on an adjusted basis, representing a 21.3% year-over-year increase, while sales fell to $37.7 billion. Analysts had been expecting General Motors earnings to amount to $1.39 per share on $37 billion in revenue. In the year-ago quarter, the automaker reported $39.9 billion in sales.

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GAAP GM earnings swing to a loss on tax reform charges

On a GAAP basis, General Motors earnings shifted to a loss of $3.65 per share for Q4 2017, compared to net income of $1.19 per share in Q4 2016. The GAAP GM earnings result includes $13.5 billion in charges. The automaker took a $7.3 billion non-cash charge in connection with the re-measurement of its deferred tax assets under the tax reform bill. GM also recorded a $6.2 billion “largely non-cash charge” as a result of the Opel/ Vauxhall sale.

Adjusted EBIT grew 18.7% year over year to $3.1 billion. The automaker sold 8.9 million vehicles around the globe through the end of December, representing an increase of 0.8% ear over year. General Motors also increased its global market share in all three of its key markets.

“Improvements in all operating segments and an intense focus on cost reductions generated a record quarter and another record year,” Executive Vice President and Chief Financial Officer Chuck Stevens said in a statement. “We plan to build on this momentum in 2018 and beyond as we focus on growth opportunities across many parts of our business.”

General Motors (GM) records solid results across regions

In North America, adjusted EBIT increased to $2.9 billion from $2.7 billion a year ago in Q4 2017, which was the third year in a row that the region saw margins of 10% or higher. The North America margin was 10.7%, while in the year-ago quarter, although wholesale volumes in North America declined 11.3% year over year. At the end of the year, General Motors’ U.S. inventory stood at 63 days’ supply, which is a decline of 90,000 units from the end of 2016. The automaker sold 3 million vehicles in the U.S. as sales of pickup trucks and crossovers reached new record highs.

Adjusted EBIT from GM International grew to $400 million in Q4 2017 from $200 million in the year-ago quarter. The quarter was the first on which General Motors and its joint ventures sold 4 million vehicles in China, led by sales of the Baojun, Buick and Cadillac brands. Sales in South America grew 13.8%. GM also sold a record number of electric vehicles during the quarter at 69,500, led by record sales of the Chevy Bolt EV at Baojun E100.

Adjusted EBT for GM Financial grew $100 million to $300 million on $3.3 billion in revenue for the segment.