GM Q3 2021 earnings were headlined by $2.4 billion in income on $26.8 billion in revenue. Compared to the third quarter of 2020, the results represent a 40 percent decrease in income and a 24.5 percent decline in revenue.
The results were supported by the following three factors:
- Strong price and mix performance in North America
- The benefit of GM’s recall cost recovery agreement with LG Electronics
- Continued strong performance at GM Financial, GM’s captive finance arm
As a result, GM is on track to deliver full-year 2021 EBIT-adjusted earnings approaching the high end of its guidance range.
GM Q3 2021 Earnings Summary
Figures in billions of USD, except for per share amounts and percentages.| Q3 2021 | Q3 2020 | Q3 2021 - Q3 2020 | % CHANGE Q3 2021 / Q3 2020 | |
|---|---|---|---|---|
| GAAP METRICS | ||||
| REVENUE | $26,779 | $35,480 | $-8,701 | -24.5% |
| NET INCOME | $2,420 | $4,045 | $-1,625 | -40.2% |
| EARNINGS PER SHARE (EPS) DILUTED | $1.62 | $2.78 | $-1.2 | -41.7% |
| NON GAAP METRICS | ||||
| EBIT-ADJUSTED | $2,922 | $5,284 | $-2,362 | -44.7% |
| EBIT-ADJUSTED MARGIN | 10.9% | 14.9% | -4.0% | 18.9% |
| AUTOMOTIVE OPERATING CASH FLOW | -$2,602 | $9,935 | -$12,537 | -126.2% |
| ADJUSTED AUTOMOTIVE FREE CASH FLOW | -$4,385 | $9,122 | -$13,507 | -148.1% |
| EPS DILUTED - ADJUSTED | $1.52 | $2.83 | $-1.3 | -46.3% |
| DIVISIONAL RESULTS | ||||
| GM NORTH AMERICA EBIT-ADJUSTED | $2,125 | $4,366 | $-2,241 | -51.3% |
| - GM NORTH AMERICA EBIT-ADJUSTED MARGIN | 10.3% | 15.0% | -4.7% | N/A |
| GM INTERNATIONAL EBIT-ADJUSTED | $229 | $10 | $+219 | +2190% |
| - CHINA EQUITY INCOME | $270 | $262 | $+8.0 | +3.1% |
| GM FINANCIAL EBT-ADJUSTED | $1,093 | $1,207 | $-114.0 | -9.4% |
GM North America
GM North America (GMNA), General Motors’ largest and most profitable division, posted:
- $20.5 billion in revenue vs. $29.1 billion in revenue in the year-ago quarter
- $2.1 billion EBIT-adjusted vs. $4.4 billion in the year-ago quarter
GM International
GM International (GMI), which excludes GM China joint venture earnings, posted:
- $2.8 billion in revenue vs. $2.7 billion in the year-ago quarter
- $229 million EBIT-adjusted vs. $10 million in the year-ago quarter
GM China Auto Joint Venture
GM’s China joint ventures posted equity income of $270 million vs. $262 million in the year-ago quarter.
GM Cruise
Cruise, GM’s division that’s developing and bringing to market a robo-taxi service, posted:
- -$286 million in net income vs. -$204 million in the year-ago quarter
- $26 million in revenue vs. the same results in the year-ago quarter
GM Financial
GM Financial, General Motors’ captive finance arm, posted:
- $1.093 billion EBT-adjusted vs. $1.207 billion in the year-ago quarter
- $3.354 billion in revenue vs. $3.421 billion in the year-ago quarter
Cadillac XT6
Guidance
As mentioned above, GM expects its full-year guidance to approach the higher end of its guidance range:
- Full-year EPS-diluted of between $5.52 and $6.52, and EPS-diluted-adjusted of between $5.70 and $6.70
- Full-year net income of between $8.1 billion and $9.6 billion, and EBIT-adjusted of between $11.5 billion and $13.5 billion
Strategic Direction
During the Q2 2021 earnings, GM provided insight into its short-term and medium-term direction, which as follows:
- Focus on profitable growth opportunities and new revenue streams
- Developing a full EV portfolio that doesn’t depend on partial solutions like hybrids and “electrified” ICE vehicles
- Prioritizing speed to market as GM launches more than 30 new EVs in North America and China by 2025
- To meet expected demand, GM is pulling forward the transition of its CAMI Assembly plant in Canada from building gas-powered vehicles to assembling the BrightDrop EV600
- BrightDrop is a new business within GM that is pioneering connected and electrified first-to-last mile delivery solutions
- It’s the result of synergies created by the automaker’s design, engineering, manufacturing and sourcing expertise
- Upcoming EV launches including GMC Hummer EV and Cadillac Lyriq are on track
- Construction in Lordstown battery plant (Ultium batteries), Factory Zero, and Spring Hill (Ultium batteries) is progressing with no delays
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Comments
All things considered it was a great earnings for GM considering the low Revenue, but Wall Street did not like it and the stock struggled today.
Ford on the other hand posted absolute blowout earnings and their shareholders celebrated. Ford not only beat Gm in earnings, but also revenue, by a lot.
Ford beat GM? 1.8 Ford net income can’t less than 2.4 net income GM. Yes, and Ford has very low margin, GM made a lot better, considering the difference in revenue.
Take a look at the cash flow? Work in process? GM did not give clear answers on this, and on the profit, $700M for GM was paper money on the credit form LG Chem, so that is not profit from operations.
Ford has saved a fortune on R&D with deals with Rivian, VW and outside vendors. Ford has avoided deploying much capital to the early stages/pre-solid state battery era of EVs yet put out a solid contender with Mach-E.
GM, Ford and Stellantis all have different strategies and it will be interesting to see who wins.
Coming into the quarter, Ford had a lot of old inventory sitting on dealer lots. In different times, Ford would have been moving: Fusions, EcoSports, Escapes, Edges and Lincoln Nautiluses at give away prices.
The chip crisis allowed Ford to make money on those vehicles.
GM Cruise is looking more and more like a losing proposition. GM should spin it off while there is still value in it.
Bad news for gm. The stock is going down. All the talk of all the new models that don’t exist and how the future is going to be so bright ain’t cutting it for investors. gm
wishes it were Tesla.
The future is so bright, little gm gotta wear shades!