General Motors’ third quarter 2017 earnings saw decreases in most hard metrics. However, the automaker achieved its first profitable quarter in all business segments, including South America, since Q4 2014.
Other third quarter 2017 highlights also include:
- Income from continuing operations impacted by $2.3 billion non-cash charge related to deferred tax assets no longer realizable due to Opel/Vauxhall sale
- EPS-diluted of $0.08 and EPS diluted-adj. of $1.32, from continuing operations
- GM Financial posted record revenues of $3.2 billion
Net revenue for Q3 2017 came in at $33.6 billion, down $5.3 billion year-over-year.
The decrease was driven primarily by decreased wholesale volumes in North America, resulting primarily from planned downtime and other actions to match supply with demand. It partially offset by improved mix and growth at GM Financial.
Operating income was $1.9 billion, down $1.2 billion from the third quarter of 2016.
Income from continuing operations (which now excludes Opel, which recently GM sold) attributable to common shareholders was $0.1 billion, down $2.6 billion year-over-year. It was impacted unfavorably by a $2.3 billion non-cash charge related to the sale of Opel/Vauxhall and lower earnings in North America.
Earnings Before Interest And Tax (EBIT)
The company reported earnings before interest and tax (EBIT) adjusted of $2.5 billion and EBIT-adjusted margin of 7.5 percent for the third quarter of 2017.
The EBIT performance represents a decrease of $1.1 billion year-over-year, primarily as a result of planned lower wholesale volumes and actions to match supply with demand in North America, partially offset by improved performance in South America, GM Financial and International Operations. Year-to-date, EBIT-adjusted is at a strong $9.8 billion.
The EBIT-adjusted margin was a decrease of 0.8 percent year-over-year.
Earnings Per Share
Earnings per share from continuing operations were $0.08 per share, down $1.68 per share.
Cash Flow And Liquidity
In Q3 2017, net cash from automotive operating activities was $1.1 billion, down $5.0 billion from Q3 2016.
This is primarily due to unfavorable working capital and other timing related impacts as a result of lower North American production.
Return On Invested Capital (ROIC)
Return On Invested Capital (ROIC) was 27.6 percent in Q3 2017, down 430 bps year-over-year, but well above the company’s 2017 target of greater than 25 percent.
Global Vehicle Deliveries
GM recorded 2.2 million vehicles globally in the third quarter of 2017, up 0.1 million year-over-year, driven primarily by growth in China and a modest recovery of the market in South America.
Q3 global market share is up 20 bps year-over-year, driven by growing share in our key markets in China, North America and South America.
Regional Division Results
- GM North America Q3 2017 performance included an EBIT-adjusted of $2.1 billion compared to $3.6 billion in Q3 2016.
- GM Europe is no longer a region for which GM reports results, as GM has sold its European Opel-Vauxhall unit to PSA Group.
- GM International Operations Q3 2017 performance included an EBIT-adjusted of $0.3 billion compared to $0.2 billion in Q3 2016.
- GM South America Q3 2017 performance included an EBIT-adjusted margin of $0.1 billion compared to a negative $0.1 billion in Q3 2016.
- GM Financial Q3 2017 performance included revenues of $3.2 billion compared to $2.4 billion in Q3 2016.