Things to Note Ahead of General Motors' (GM) Q3 Earnings
General Motors GM is slated to release third-quarter 2023 results on Oct 24, before market open. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at $1.84 per share and $43.30 billion, respectively.
The Zacks Consensus Estimate for General Motors’ third-quarter earnings per share has been revised downward by 4 cents in the past seven days. The bottom-line projection also indicates a year-over-year decline of 18.22%. The top-line estimate suggests a year-over-year growth of 3.36%.
In the last reported quarter, GM topped earnings estimates on better-than-expected results from the North America segment. Over the trailing four quarters, the company topped the Zacks Consensus Estimate on all occasions, with the average being 22.6%. This is depicted in the graph below:
General Motors Company Price and EPS Surprise
General Motors Company price-eps-surprise | General Motors Company Quote
Factors at Play
General Motors’ third-quarter sales in the United States rose 21% year over year to 674,336 units thanks to improving inventory levels and pent-up demand. Volumes at key brands, namely Chevrolet, Cadillac, Buick and GMC, increased by 21%, 6%, 54% and 19%, respectively.
Meanwhile, sales in the world’s largest auto market declined on a year-over-year basis. In China, General Motors sold 541,830 vehicles during the third quarter of 2023, down 14% year over year. The company saw its sales fall across all key brands— Chevrolet (20.3%), Buick (18.4%), Cadillac (10.7%) and Wuling (8.08%).
Our model estimate for revenues from the GMNA segment stands at $36.5 billion, calling for a 5.4% year-over-year increase. We forecast the wholesale shipments from the unit to grow 7.1% on a yearly basis. Meanwhile, our projection for revenues from the GMI segment (excluding GM China joint venture) is pegged at $3.6 billion, indicating a decline of 8.8%. We anticipate the wholesale shipments from the unit to decline 10.4% on a yearly basis.
General Motors anticipates lower pension income and weaker contributions from the GM Financial segment in 2023. Our estimate for the sales from the GM Financial unit is pegged at $3.07 billion, suggesting a decline of 3.5% year over year. We expect operating income from the unit to be around $604.6 million, suggesting a decline of 33.6% from the year-ago period’s levels.
Our estimate for sales from GM’s autonomous driving unit, Cruise, is pegged at $25 million, suggesting no changes from the year-ago quarter’s levels. We expect the Cruise unit to incur an operating loss of $517 million in the to-be-reported quarter, widening from $497 million incurred in the year-ago period amid high operating costs.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for General Motors this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
Earnings ESP: It has an Earnings ESP of -6.53%. This is because the Most Accurate Estimate of $1.72 per share is pegged 12 cents lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: General Motors currently carries a Zacks Rank of 3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With the Favorable Combination
While an earnings beat looks uncertain for GM, here are a few players from the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
PACCAR PCAR will release third-quarter 2023 results on Oct 24. The company has an Earnings ESP of +1.18% and a Zacks Rank #2.
The Zacks Consensus Estimate for PACCAR’s to-be-reported quarter’s earnings and revenues is pegged at $2.07 per share and $8.02 billion, respectively. PCAR surpassed earnings estimates in the trailing four quarters, with the average surprise being 15.2%.
Oshkosh Corp OSK will release third-quarter 2023 results on Oct 26. The company has an Earnings ESP of +8.24% and a Zacks Rank #3.
The Zacks Consensus Estimate for OSK’s to-be-reported quarter’s earnings and revenues is pegged at $2.18 per share and $2.46 billion, respectively. Oshkosh surpassed earnings estimates in two of the trailing four quarters for as many misses, with the average surprise being 27.45%.
Cummins CMI is expected to report third-quarter 2023 results on Nov 2. The company has an Earnings ESP of +0.48% and a Zacks Rank #3.
The Zacks Consensus Estimate for Cummins’ to-be-reported quarter’s earnings and revenues is pegged at $4.70 per share and $8.19 billion, respectively. CMI missed earnings estimates in three of the trailing four quarters and surpassed once, with the average negative surprise being 5.51%.
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Cummins Inc. (CMI) : Free Stock Analysis Report
PACCAR Inc. (PCAR) : Free Stock Analysis Report
General Motors Company (GM) : Free Stock Analysis Report
Oshkosh Corporation (OSK) : Free Stock Analysis Report
