10-QPeriod: Q2 FY2017

General Motors Co Quarterly Report for Q2 Ended Jun 30, 2017

Filed July 25, 2017For Securities:GM

Summary

General Motors Co. (GM) reported its financial results for the second quarter and first half of 2017. For the quarter ended June 30, 2017, GM reported total net sales and revenue of $36.98 billion, a slight decrease from $37.38 billion in the same period last year. Net income attributable to common stockholders was $1.66 billion, down from $2.87 billion in Q2 2016. Diluted earnings per share were $1.09, compared to $1.81 in the prior year quarter. The significant factors impacting the results include the planned divestiture of the European Business, which is being presented as discontinued operations, and ongoing strategic adjustments in various international markets. For the first half of 2017, total net sales and revenue increased to $74.25 billion from $70.40 billion in the first half of 2016. However, net income attributable to common stockholders decreased to $4.27 billion from $4.82 billion in the comparable period. Diluted earnings per share also declined to $2.80 from $3.05 year-over-year. The company continues to focus on core operating efficiencies, technology and innovation, and growth in key markets like China, while managing significant legal matters and restructuring charges.

Financial Highlights

48 data points
Beta

Revenue

$36.98B

20.1% Gross Margin

Net Income

$1.66B

4.5% Net Margin

EPS (Diluted)

$1.09

Total Assets

$240.30B

Cash & Equivalents

$16.60B

Free Cash Flow

$3.17B

Financial Statements
Beta
Revenue$36.98B
Cost of Revenue$29.54B
Gross Profit$7.45B
SG&A Expenses$2.48B
Operating Expenses$34.69B
Operating Income$2.30B
Net Income$1.66B
EPS (Basic)$1.11
EPS (Diluted)$1.09
Shares Outstanding (Basic)1.50B
Shares Outstanding (Diluted)1.52B

Key Highlights

  • 1Total net sales and revenue for Q2 2017 were $36.98 billion, a slight decrease from $37.38 billion in Q2 2016.
  • 2Net income attributable to common stockholders for Q2 2017 was $1.66 billion, a decrease from $2.87 billion in Q2 2016.
  • 3Diluted earnings per share for Q2 2017 were $1.09, down from $1.81 in Q2 2016.
  • 4The European Business (Opel/Vauxhall) is classified as discontinued operations due to the pending sale to PSA Group.
  • 5GM Financial segment saw significant revenue growth of 39.9% in Q2 2017.
  • 6The company repurchased approximately $1.5 billion of its common stock in the first six months of 2017.
  • 7Restructuring charges related to market exits in India and South Africa amounted to $460 million in Q2 2017.

Frequently Asked Questions

General Motors is selling its European Business (Opel/Vauxhall) to PSA Group for an estimated net consideration of $2.2 billion. This business is presented as discontinued operations. The company expects to recognize a pre-tax charge of approximately $5.5 to $6.0 billion related to this sale, primarily due to deferred tax assets, pension liabilities, and disposal losses.

GM Financial showed strong performance, with total revenue increasing by 39.9% to $2.99 billion in Q2 2017 compared to the prior year. Earnings before income taxes-adjusted increased by 66.8% to $357 million. This growth was driven by increased leased vehicle income due to a larger lease portfolio and expanded lending programs in North America.

GM continues to be involved in significant litigation, most notably related to the ignition switch recall and other safety recalls. While some cases have seen favorable outcomes or settlements (e.g., shareholder class action settlement), the company faces ongoing personal injury claims, economic loss claims, and investigations by government entities, which could result in material damages, fines, or penalties.

For the full year 2017, GM expects strong consolidated financial results, with total net sales and revenue, EBIT-adjusted, and EBIT-adjusted margins expected to meet or exceed 2016 levels. The company forecasts an Adjusted Automotive Free Cash Flow of approximately $7 billion and Diluted EPS-Adjusted between $6.00 and $6.50.