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General Motors (GM) to Report Q2 Earnings: What's in Store?

Zacks Equity Research

General Motors Company GM is set to report second-quarter 2019 results on Aug 1, before the opening bell. In the last reported quarter, the company delivered a positive earnings surprise of 29.4%.

It delivered a positive earnings surprise in three of the trailing four quarters while missed estimates once, the average surprise being 22.6%. The long-term expected earnings growth rate for the company (over three to five years) is currently pegged at 8.9%.

In the past three months, shares of General Motors have outperformed the industry it belongs to. Over this time frame, shares of the company have gained 4.7% against the industry’s 1.5% decline.

Let’s see how things are shaping up for this announcement.

Factors to Consider

In second-quarter 2019, General Motors’ sales declined 1.5% on a year-over-year basis. During the quarter, sales of sedan and niche models continued to decline while the sale of crossovers improved. Notably, while the auto giant is not eliminating all traditional vehicles from its lineup, it is discontinuing many models. Moreover, the company is adding new crossovers and SUVs to its portfolio, and updating its best-sellers. All these initiatives are likely to have positively influenced General Motors’ second-quarter results.

During the quarter, the company took some measures to restructure operations and develop future technologies. For the soon-to-be-reported quarter, the Zacks Consensus Estimate for the General Motors North America (“GMNA”) segment’s revenues is pegged at $27.7 billion. In first-quarter 2019, net sales and revenues of General Motors North America were $27.4 billion.

General Motors Company Price and EPS Surprise

 

General Motors Company Price and EPS Surprise

General Motors Company price-eps-surprise | General Motors Company Quote

Earnings Whisper

Our proven model does not conclusively predict that General Motors is likely to beat on earnings this quarter. This is because, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: General Motors has an Earnings ESP of -12.47% as the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.25 and $1.43, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Note that we caution against Rank #4 and 5 (Sell-rated) stocks going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

Here are some stocks worth considering, which have the right combination of elements to beat estimates this time around:

Cummins Inc. CMI has an Earnings ESP of +3.49% and carries a Zacks Rank #3 at present. It is slated to release second-quarter 2019 results on Jul 31.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Barrick Gold Corporation GOLD currently has an Earnings ESP of +0.70% and carries a Zacks Rank of 2. It is slated to release second-quarter 2019 results on Aug 12.

Penske Automotive Group, Inc. PAG presently has an Earnings ESP of +0.42% and carries a Zacks Rank of 3. The company is slated to release second-quarter 2019 results on Jul 30.

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Penske Automotive Group, Inc. (PAG) : Free Stock Analysis Report
 
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