Why General Motors’ Revenue Could Fall in 4Q17



Existing trend in revenues

In 3Q17, General Motors (GM) reported revenues of $33.6 billion, which reflected a decrease of 13.5% from $38.9 billion in 3Q16. The company’s lower 3Q17 total US sales volume had a negative impact on its third-quarter revenues. On the brighter side, its revenues in China and South America rose 12.3% and 17.6% YoY (year-over-year), respectively. Now let’s find out what analysts are estimating for GM’s 4Q17 revenues.

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GM’s revenue estimates for 4Q17

Analysts estimate that General Motors’ 4Q17 revenues will be $36.5 billion, a 16.8% fall from $43.9 billion in the corresponding quarter of the previous year.

Analysts also expect a 12.6% fall in the company’s fiscal 2017 revenues compared to 2016.

Lower 4Q17 sales

In October, November, and December 2017, GM’s total US sales fell 2.2%, 2.9%, and 3.3%, respectively, YoY. The company continued to cut fleet sales to protect its profits through 2017.

The United States is the largest single market for General Motors. That’s why lower US fleet sales could hurt the company’s revenues in the fourth quarter.

At the beginning of 2017, GM announced its plan to exit several markets, including Europe, South and East Africa, and India. That move could lower the company’s global sales and negatively affect its revenues.

Among other legacy automakers (IYK), Ford (F), Fiat Chrysler (FCAU), and Toyota (TM) also make a large portion of their revenues from the US auto market. In the last few quarters, FCAU and TM have tried to improve their pickup truck lineup in the US market to benefit from the high truck demand.

In the next part, we’ll find out what analysts are estimating for General Motors’ 4Q17 profit margins.


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