10-QPeriod: Q1 FY2014

General Motors Co Quarterly Report for Q1 Ended Mar 31, 2014

Filed April 24, 2014For Securities:GM

Summary

General Motors (GM) reported a net income of $213 million for the first quarter of 2014, a significant decrease from $1.175 billion in the same period of 2013. This decline was largely driven by substantial recall-related charges totaling approximately $1.3 billion. Despite the net income drop, total net sales and revenue saw a slight increase of 1.4% to $37.4 billion, primarily boosted by a strong performance from GM Financial. The company's automotive segment faced challenges with increased costs of sales, particularly due to recall expenses and unfavorable product mix. However, GMNA (North America) demonstrated revenue growth driven by strong pricing and favorable product mix, though EBIT-adjusted was impacted by recall costs. GM Financial showed significant revenue growth, more than doubling its revenue year-over-year, which helped offset some of the automotive segment's pressures.

Financial Highlights

48 data points
Beta

Revenue

$37.41B

8.8% Gross Margin

Net Income

$213.00M

0.6% Net Margin

EPS (Diluted)

$0.06

Total Assets

$173.61B

Cash & Equivalents

$19.43B

Free Cash Flow

$217.00M

Financial Statements
Beta
Revenue$37.41B
Cost of Revenue$34.13B
Gross Profit$3.28B
SG&A Expenses$2.94B
Operating Expenses$37.94B
Operating Income-$535.00M
Interest Expense$103.00M
Net Income$213.00M
EPS (Basic)$0.08
EPS (Diluted)$0.06
Shares Outstanding (Basic)1.59B
Shares Outstanding (Diluted)1.69B

Key Highlights

  • 1Net income decreased significantly to $213 million from $1.175 billion in Q1 2013, primarily due to $1.3 billion in recall-related charges.
  • 2Total net sales and revenue increased slightly by 1.4% to $37.4 billion, driven by strong performance from GM Financial.
  • 3GM Financial's revenue more than doubled to $1.093 billion from $540 million in Q1 2013.
  • 4Automotive cost of sales increased by 4.6%, largely impacted by recall charges and higher material/freight costs.
  • 5GMNA's revenue grew 6.2% to $24.4 billion, supported by favorable pricing and product mix, but EBIT-adjusted was down due to recall costs and increased material expenses.
  • 6The company is facing multiple lawsuits and government investigations related to the ignition switch recall, which could have a material adverse effect.
  • 7Dividends declared per common share were $0.30, compared to no dividends in the prior year's first quarter.

Frequently Asked Questions

The primary reason for the significant decrease in net income was the substantial recall-related charges totaling approximately $1.3 billion in the first quarter of 2014. These charges were primarily related to ignition switch recalls and other safety-related campaigns.

GM Financial showed very strong performance, with total net sales and revenue increasing by 102.4% to $1.093 billion. This growth was driven by increased finance charge income and leased vehicle income, largely due to the acquisition of Ally Financial's international operations.

General Motors has incurred significant charges related to recalls and is facing multiple government investigations and private litigation as a result. The company stated that it believes the amounts recorded are adequate to cover the costs of these recall campaigns but acknowledges that the resolution of these matters, including potential fines and penalties, could have a material adverse effect on its financial position, results of operations, or cash flows.

Yes, General Motors declared and paid dividends on its common stock totaling $481 million, or $0.30 per share, during the first quarter of 2014. This was the first common stock dividend paid by the company.