General Motors Company reported first quarter 2019 earnings today, with the figures headlined by $2.1 billion in income on $34.9 billion in revenue.
Compared to the first quarter of 2018, GM Q1 2019 results represent a $1.0 billion (93.2 percent) increase in income, $0.7 billion increase in operating income, and a $1.2 billion decrease in revenue.
“GM’s first-quarter operating results were in line with expectations we shared in January, said GM Chairman and CEO Mary Barra. “My confidence in the year ahead remains strong, driven by our all-new full-size truck launch and our ongoing business transformation.”
Adjusted GM Q1 2019 earnings before interest and taxes (EBIT) was $2.3 billion, earnings per share (EPS) diluted were $1.48 and EPS-diluted-adjusted was $1.41.
GM says that its “transformation cost savings of $2 billion to $2.5 billion through 2019” remains on track.
GM Q1 2019 Earnings Summary
| METRIC | Q1 2019 | Q1 2018 | Q1 2019 - Q1 2018 (IN $) | % CHANGE Q1 2019 / Q1 2018 (IN %) |
|---|---|---|---|---|
| GAAP METRICS | ||||
| NET REVENUE | $34.90 | $36.10 | -1.20 | -3.32% |
| INCOME | $2.10 | $1.10 | +1.00 | +90.91% |
| AUTOMOTIVE OPERATING CASH FLOW | -$2.20 | -$1.20 | -0.40 | -11.43% |
| EARNINGS PER SHARE (EPS) DILUTED | $1.48 | $0.77 | +0.71 | +92.21% |
| NON GAAP METRICS | ||||
| EBIT-ADJUSTED MARGIN | 6.60% | 7.20% | -0.01 | -8.33% |
| EBIT-ADJUSTED | $2.30 | $2.60 | -0.30 | -11.54% |
| ADJUSTED AUTOMOTIVE FREE CASH FLOW | $(3.90) | $(3.50) | -0.40 | -11.43% |
| EPS DILUTED - ADJUSTED | $1.41 | $(1.43) | +2.84 | +198.6% |
Bullish On Trucks
GM says that its full-size truck launch is ahead of plan, a circumstance that drove strong pricing for the quarter in North America. In fact, average transaction prices (ATPs) on GM’s all-new full-size Crew Cab pickup trucks – the 2019 Chevrolet Silverado and 2019 GMC Sierra – are up $5,800 over the outgoing models versus Q1 2018 based on J.D. Power PIN data.
Q1 sales of the 2019 Chevrolet Silverado and GMC Sierra light-duty crew cabs were up 20 percent year-over-year, delivering on GM’s strategy to launch high- content, high-margin trucks first. The 2019 GMC Sierra leads the segment in pricing, with more than 95 percent of its sales being comprised of high-end models. Full production of regular and double cabs began in March, as per plan.
GM begins the next phase of its full-size pickup truck launch in the second half of the year with the 2020 Chevrolet Silverado HD and 2020 GMC Sierra HD. These vehicles will be built at the GM Flint Assembly plant, where 1,000 jobs were added and capacity was increased to meet anticipated customer demand.
Manufacturing Investments
GM says that it “remains firmly committed to investing in its U.S. manufacturing operations” and has invested $22 billion in the U.S., including $4.3 billion since the beginning of 2017.
In March, the company announced a $300 million investment in its Orion, Michigan assembly plant to produce a future Chevrolet electric vehicle based on the Bolt EV architecture, adding 400 new jobs at the facility. The company is also adding a second shift and more than 400 new jobs at the GM Bowling Green, Kentucky plant to support production of the next-generation Corvette (see more on mid-engine Corvette / Corvette C8). GM has invested more than $900 million in its Bowling Green facility since 2011.
GM also says that it “remains committed to making job opportunities available for all 2,800 U.S. hourly employees impacted by the company’s decision to unallocate plants” The automaker stated “more than 1,300 hourly employees have accepted jobs at other GM facilities supporting growth segments including trucks, crossovers and SUVs.”
Segment Results
GM’s four segments performed as follows during the quarter:
- North America: $1.9 billion EBIT-adjusted vs. $2.2 billion in Q1 2018. Results were impacted by planned downtime for full-size SUVs and partially offset by strong pickup truck performance.
- International: $0.0 billion (break-even) EBIT-adjusted vs. $0.2 billion in Q1 2018. Results include $0.4 billion in equity income from China, along with “strong cost performance” in Korea as a result of restructuring actions.
- GM Financial: $0.4 billion EBT adjusted vs. $0.4 billion in Q1 2018. The results were driven by portfolio growth, offset by higher interest costs, and lower residual gains on terminated leased vehicles.
- GM Cruise: $(0.2) billion EBIT-adjusted vs. $(0.2 billion) in 2018. In 2019, GM Cruise will double the number of employees working on self-driving vehicles “as it progresses toward commercialization”
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Comments
Of course ATPs are up on the trucks, the old ones have enormous discounts and the new ones have average discounts.
So tired of GM spinning this crap.
Spinning things is their responsibility/goal for shareholders and stability
ATPs are likely also up due to the current truck availability being primarily the higher trim levels
ArcticDog – it’s not spin, it’s reality.
They have surged, and it is an actual metric. You want to get into the why… but the fact is that the metric itself is up. It will continue being up once there are no more K2s left to sell because the new trucks are more expensive as a whole.
But, but bad interiors, Scary Marry, Ford is da best!! and poor Camaro sales…. Lol, keep batting down the haters GM!…
The Custom Trail Boss is going for $35k and doesn’t even have a center storage bin and only has the option of a 6L80 and 3.42 axle ratio. Even the headlights are cheap halogens. The LT Trail Boss is still just an LT trim level and still costs $45-50k and doesn’t even have the option of the 10-speed. Worst of all they introduce these trucks on the totally new T1 platform and STILL use a wax coated frame whereas the Colorado and Canyon even come with a painted frame. The ATP and profit margins really aren’t a surprise.
The custom Trail Boss is a work truck with a lift and some additional capability. Its purpose is to be very affordable. It does exactly that.
The LT TB is an LT. Precisely that. And it offers a lot of capability at that price point, satisfying a huge portion of the segment. You should realize that with these trucks, GM is getting the money that owners would have otherwise spent in the aftermarket. People already spend that much… they’re just now spending it with GM upfront, rather than at a shop buying and installing a lift kit.
If you want truly top of the line, the vehicle exists in the Sierra AT4… though I would argue that there is opportunity for a Silverado equivalent just as well.
Alex, maybe you can answer this:
is $2.1b income (guessing 7%?) on $34.9b revenue good, bad or sorta the historical norm-Ish?
Just curious how it compares with past performance. Thanks …
Like that picture of the regular cab short bed, we need that in the U.S.!
Market share down to 15.6 percent. Has to be a record low in this market. Automotive News had an article that states inventory is at near record high. With a potential strike action coming up on the third quarter, and a coming fire sale to move inventory, the rest of the year should be interesting for Machete Mary and company.
Ha You have no idea what your talking about. We cant even keep a Lt TB on the Lot and the 2019 Hds are going like kids in a candy store. When the New 2020 Hd comes out Watch how many get sold. There will be a Premium over MSRP on this truck!
And Wall Street was so “impressed” with the loss of market share that GM’s stock was down 2.65 percent.
And NASDAQ fell roughly the same amount.
It’s also well known that they don’t care about market share. They have managed to keep profit constant while dropping market share. volume and revenue. That’s called a win.
By the way, why is market share is down? Because the truck launch is nowhere near complete. Just wait until T1 is in full swing… the new full size SUVs are out, the new Cadillac line is pumping. Then we can talk about market share.
Revenue is down. See chart above.
GM trades on the Dow which was up today.
Giving away market share is never good. It tells me your product is considered inferior.
GM’s profits are up only because Machete Mary fired 15000 employees to appease Wall Street.
Regarding T1, from what I have been told is that it is facing delay after delay. I guess that’s what happens when your engineering and design departments are gutted.