GM Q1 Adj. Profit Beats View; Affirms FY18 Outlook

Automaker General Motors Co. (GM) on Thursday reported a 60 percent fall in profit for the first quarter from last year, reflecting lower revenues and a charge related to the company’s Korean operations restructuring.

However, adjusted earnings per share for the quarter beat analysts’ estimates and the company affirmed its financial outlook for fiscal 2018. However, the company’s shares are declining more than 2 percent in pre-market activity.

For the first quarter, the company reported net income attributable to stockholders of $1.05 billion or $0.72 per share, down from $2.61 billion or $1.70 per share in the same period last year.

GM recorded a $942-million pre-tax charge on asset impairment and termination benefits related to Korea restructuring. The charge included $464 million in non-cash asset impairments.

Adjusted earnings for the quarter were $2.04 billion or $1.43 per share, compared to $2.68 billion or $1.75 per share last year.

On average, 19 analysts polled by Thomson Reuters expected earnings of $1.24 per share. Analysts’ estimates typically exclude special items.

Total net sales and revenue for the quarter declined 3.1 percent to $36.10 billion from $37.27 billion a year ago. Analysts expected revenues of $34.66 billion for the quarter.

GM’s adjusted earnings before interest and tax or adjusted EBIT was $2.61 billion, down 26.6 percent compared to $3.55 billion last year. The decline in adjusted EBIT reflects the impact of planned production downtime in preparation for the company’s all-new full-size Chevrolet Silverado and GMC Sierra truck launches later this year.

North America EBIT declined 37.1 percent on an adjusted basis, reflecting planned downtime in support of new full-size truck launches.

Looking ahead, GM said it said it remains confident in the full-year guidance announced in January. The company continues to expect its 2018 core adjusted automotive free cash flow to be in line with 2017 results as GM benefits from strong EBIT-adjusted performance and favorable seasonal cash flow factors later this year.

The Street expects earnings of $6.33 per share for the year on revenues of $144.31 billion.

by RTTNews Staff Writer

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