What to Look For When GM Reports Earnings Thursday Morning

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General Motors Co. (NYSE: GM) reports first-quarter earnings before markets open Thursday. Year over year, earnings and revenues are expected to be lower than 2017 quarterly earnings and revenues.

According to data compiled by Kelley Blue Book, first-quarter North American sales volume is 3.8% and GM’s market share rose by 1.9% from 17.2% in the year-ago first quarter to 17.5% in 2018. GM sold 715,794 units in the quarter,¬†compared with sales of 689,521 in the first quarter of 2017.

The company no longer sells its cars in Europe, but first-quarter sales rose 8% in China on 40% growth in Cadillac sales to 39,414 and 8.7% growth in Buick sales to 249,866 units. Both brands sell more units in China than in the United States. The company’s first-quarter sales in China totaled 986,052 units

GM’s best-seller in North America is its Chevy Silverado pickup, and sales rose 5.5% year over year to 135,545 units. The model posting the highest sales growth in the first quarter is the Chevy Equinox, a midsize sport utility vehicle that saw a sales gain of 31.4% to 82,398 units year over year in the quarter.

GM’s Cadillac brand saw North American sales rise 8.1% in the first quarter and its market share rise to 0.9%. The price was steep though: first-quarter incentive spending rose 56.9% year over year to $8,741 per Cadillac sold.

GM will no longer report monthly U.S. sales figures. Second-quarter sales totals will be announced in July prior to the release of the company’s quarterly results.

Analysts are expecting first-quarter earnings per share (EPS) of $1.28, down from $1.75 a year ago, and revenues of $34.6 billion, down from $41.2 billion. When GM reported results in January, consensus estimates called for EPS of $1.50 on sales of $34.12 billion.

GM faces the same commodity price headwind that competitor Ford faces, especially in the price of aluminum and steel. That may be the reason that EPS expectations have sunk so much since early February.

The company’s stock traded down about 0.3% in the early afternoon Wednesday, at $37.81 in a 52-week range of $31.92 to $46.76. The 12-month price target is $47.96. At the current price, GM’s dividend yield is 3.21%.

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