General Motors reported first quarter 2018 earnings that were significantly lower than those during the same time frame in 2017.
GM’s Q1 2018 earnings summary is as follows:
- Net income of $1.05 billion, down 59.8 percent year-over-year
- Operating profit of $2.6 billion, down 26.6 percent year-over-year
- Revenue of $36.1 billion, down 12.4 percent year-over-year
- EPS (Earnings per share) of $1.43, down 18.3 percent year-over-year
- EPS-diluted of $0.77 and EPS-diluted-adjusted of $1.43
“Results this quarter were in line with our expectations with planned, lower production in North America related to the transition to our all-new Chevrolet Silverado and GMC Sierra,” CEO Mary Barra said in a statement. “We are on plan to deliver another strong year in 2018.”
Performance By Operating Segment
GM’s first quarter 2018 results reflected profitability in all operating segments, while setting record earnings in China and from GM Financial.
- GM North America reported revenue of $27.8 billion and pre-tax earnings (EBIT-adjusted) of $2.2 billion on an 8 percent margin. The results compare with $29.3 billion in revenue and $3.5 billion in EBIT-adjusted in Q1 2017. The decrease is caused by planned downtime to support new truck launches later in the year. GM North America is on track to sustain 10 percent full-year margin, says the automaker.
- GM International Operations, which includes all operations outside of North American including South America and China, reported revenue of $4.8 billion and pre-tax earnings (EBIT-adjusted) of $200 million, including record equity income in China of $0.6 billion. The results compare with $5.1 billion in revenue and $200 million in EBIT-adjusted in Q1 2017.
- GM Financial reported revenue of $3.4 billion and pre-tax earnings (EBIT-adjusted) of $400 million. The results compare with $2.7 billion in revenue and $200 million in in earnings in the first quarter of 2017.
GM’s first-quarter results follow a strong 2017, in which the Detroit automaker’s full-year pre-tax profits of $12.8 billion matched its record-breaking 2016 results. On the whole, GM took $3.9 billion loss in 2017 as it adjusted to new tax laws and took one last hit from the sale of its money-losing European business to PSA Groupe SA in France. GM took a $6.2 billion hit on the year in its sale of Opel-Vauxhall, combined with a $7.3 billion non-cash write-down of its tax assets in the fourth quarter to drive the annual loss.
GM’s income from continuing operations was negatively impacted by a $900 million special charge related to restructuring of its Korean division. Additionally, the automaker was impacted by planned production downtime in preparation for its all-new full-size Chevrolet Silverado and GMC Sierra truck launches later this year.
The dip in performance was mostly caused by planned downtime for pickup truck production and an aggressive restructuring effort in South Korea.
GM is expecting its fresh crossover lineup to keep margins high early in 2018 as it preps to launch all-new versions of its two most important products – the 2019 Silverado from Chevrolet and 2019 Sierra from GMC – later in the year.
The Detroit automaker is continuing to cut costs abroad this year with its restructuring in South Korea, while doubling-down on high-margin products in 2018 in the United States market.