10-QPeriod: Q1 FY2013

General Motors Co Quarterly Report for Q1 Ended Mar 31, 2013

Filed May 2, 2013For Securities:GM

Summary

General Motors (GM) reported its first-quarter 2013 results, showing a decrease in net sales and revenue compared to the prior year. Net income attributable to stockholders also declined, driven by lower automotive sales and revenue, although this was partially offset by a strong performance from GM Financial. The company experienced a significant drop in operating income, largely due to the absence of a substantial goodwill impairment charge that was present in the first quarter of 2012. Despite the revenue decline, GM maintained a solid cash position, with an increase in cash and cash equivalents. The company also continued its strategic expansion of GM Financial through acquisitions, aiming to enhance its financing capabilities. However, ongoing challenges in the European market led to a reported loss in that segment. Investors should note the company's continued focus on managing costs and its strategic investments in GM Financial.

Financial Highlights

50 data points
Beta

Revenue

$36.88B

11.6% Gross Margin

Net Income

$1.18B

3.2% Net Margin

EPS (Diluted)

$0.58

Total Assets

$153.78B

Cash & Equivalents

$20.64B

Free Cash Flow

-$1.12B

Financial Statements
Beta
Revenue$36.88B
Cost of Revenue$32.62B
Gross Profit$4.27B
SG&A Expenses$2.95B
Operating Expenses$35.92B
Operating Income$959.00M
Interest Expense$91.00M
Net Income$1.18B
EPS (Basic)$0.63
EPS (Diluted)$0.58
Shares Outstanding (Basic)1.37B
Shares Outstanding (Diluted)1.51B

Key Highlights

  • 1Total net sales and revenue decreased by 2.3% to $36.9 billion in Q1 2013 compared to $37.8 billion in Q1 2012.
  • 2Net income attributable to stockholders decreased to $1.175 billion in Q1 2013, down from $1.315 billion in Q1 2012.
  • 3Operating income decreased significantly to $959 million from $996 million, primarily due to the absence of a large goodwill impairment charge in the prior year's quarter.
  • 4GM Financial showed strong performance with revenue increasing by 25.3% to $540 million, contributing positively to overall results.
  • 5Cash and cash equivalents increased to $20.6 billion at the end of Q1 2013, up from $18.4 billion at the end of 2012.
  • 6The European segment (GME) reported an adjusted EBIT loss of $175 million, reflecting continued economic challenges in the region.
  • 7The company is actively expanding GM Financial through acquisitions, aiming to double its assets and enhance its financing capabilities.

Frequently Asked Questions

Total net sales and revenue decreased by 2.3% to $36.9 billion in the first quarter of 2013. This was primarily driven by decreased wholesale volumes of $0.9 billion (approximately 40,000 vehicles), an unfavorable net foreign currency effect of $0.4 billion, and unfavorable vehicle pricing effects of $0.2 billion. These decreases were partially offset by favorable vehicle mix of $0.6 billion and increased GM Financial finance income of $0.1 billion.

GM Financial demonstrated strong performance, with revenue increasing by 25.3% to $540 million in Q1 2013. This growth was driven by increased finance income due to a larger loan portfolio balance and increased lease income from a larger lease portfolio. GM Financial is strategically important as the company continues to expand its capabilities through acquisitions, aiming to double its assets and enhance its financing services for dealers and customers.

The European market continues to face challenges due to the sovereign debt crisis, high unemployment, and overcapacity. GM's European segment (GME) reported an adjusted EBIT loss of $175 million for the quarter. The company has a plan to strengthen its operations through product portfolio investments, revised brand strategy, cost reductions including restructuring, and leveraging synergies from its alliance with PSA. However, management expects to continue incurring losses in the region in the short-term due to adverse economic conditions.

General Motors maintained a strong liquidity position, with cash and cash equivalents increasing to $20.6 billion at the end of Q1 2013. Total available liquidity was $35.3 billion, including $11.0 billion available under credit facilities. The company believes its current liquidity is sufficient to meet its needs, but anticipates substantial cash requirements for reinvestment, strategic acquisitions (like those for GM Financial), debt servicing, and dividend payments.