GM’s US Sales and What They Could Mean for 1Q17 Revenues
Existing revenue trend
In 4Q17, General Motors (GM) reported strong revenues of about $43.9 billion, which reflected a rise of 9% over the $39.6 billion in revenues we saw in 4Q15. This positive growth in revenues was primarily driven by continued strength in GM’s global vehicle sales, especially in North America, and higher sales of heavyweight vehicles.
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GM’s 1Q17 revenue estimates
Analysts estimate that GM’s 1Q17 revenues will remain firm at $40.3 billion—up by ~8.2% from its revenues of $37.3 billion in 1Q16. Remember, in addition to analysts’ recommendations, it’s important for investors to pay attention to such revenue estimates, as they can reflect market expectations from the company. These estimates can also serve as a proxy for what might be priced into the market.
Will US sales boost revenues?
GM’s first quarter US retail sales were stronger on a YoY (year-over-year) basis. But it’s important to note that vehicle retail sales tend to yield higher profit margins for automakers as compared to fleet sales. We can thus expect GM’s increased US sales to contribute positively to its global revenues in 1Q17.
Continue to the next article for a look at what analysts are estimating for GM’s 1Q17 margins.