GM Grew This Much in 2016’s Second Quarter

Earlier today the General announced a Q2 net income increase of $2.9 billion, up 157 percent compared to $1.1 billion this time last year. 

“This was an outstanding quarter for GM,” CEO Mary Barra said in a statement. “We’ll continue to focus on driving profitable growth and leveraging our technical expertise to lead in the future of personal mobility.”

Earnings Per Share diluted clocked in at $1.81, compared to $0.67 in Q2 2015–EPS diluted-adjusted was a record $1.86, a 44 percent gain compared to last year’s $1.29. The results trounced Wall Streets $1.52 per share expectations by just shy of 20 percent.

In addition GM raised its earnings guidance for the remainder of 2016, saying it fully expects to clear between $5.50 and $6 per share, up from it’s original forecast between $5.25 and $5.75 per share.

Revenue grew 11 percent to $42.37 billion, a record breaker for New GM.

North American All-Stars

gmna q2 2016

North America is leading the charge for GM despite selling fewer units. EBIT grew 31 percent to $3.65 billion on the back of reduced fleet sales, helping to increase profit margins for the quarter to 12.1 percent up from 10.5 percent in Q2 2015.

Lower gas prices have helped GM sell a richer mix of trucks and SUVs in North America which added to the improving profit margins. ATP on full-size trucks is up $2,700 per unit compared to 2015, and quarterly ATPs are up $1,500 across all models and brands.

Fleet sales were reduced by roughly 1 percent while retail gained 1.3 percent YoY.

Back to Black in Europe

gme q2 2016

GM’s long struggling European ops returned to profitability this quarter, swinging from a $45 million loss last year to $137 million in the black this year. This marks the second consecutive quarter GM Europe hasn’t posted a loss.

Prior to the Brexit, GM was on pace to at least break even in the old world, but adverse impacts on the Sterling could hit GM hard, potentially to the tune of $400 million in the back half of 2016.

International Scrambles

gmio q2 2016

GM’s international arm–which includes China– saw earnings crater some 52 percent to $169 million. Hardships in the Middle East and currency pressures in Egypt and Australia were fingered as the primary culprits.

It’s expected that GM’s international ops will continue to struggle for the remainder of the year thanks to the same conditions that contributed to a 24 percent drop off in international earnings through the first six months of 2016.

The Chinese Conundrum

china q2 2016

Income from Chinese joint ventures were table flat versus 2016. Profit margins also fell from 10.3 percent in 2015 to 9.2 percent this year.

Buick, Baojun and Cadillac are all enjoying success in China, but results have been dragged down by soft demand for small cars and commercial vehicles.

Financing Frenzy

gm financial q2 2016

With Q2 net revenue up 51 percent to $2.29 billion, GM Financial was the second biggest contributor to the General’s bottom line after North America. Pretax income was up to $226 million, some 18 percent.

“When you deliver cars, trucks and crossovers customers really value, and generate efficiencies across the enterprise, great results follow,” said Chuck Stevens, GM executive vice president and chief financial officer. “With our aggressive vehicle launch cadence and robust global industry sales, we are confident that we can continue to achieve strong financial performance.”

Comments