Q1 2018 earnings recap
In Q1 2018, General Motors (GM) reported adjusted EPS of $1.43, which was 18.3% lower than its Q1 2017 adjusted EPS of $1.75. On the positive side, it was far better than Wall Street analysts’ EPS estimate of $1.27.
GM has reported a YoY (year-over-year) increase in earnings in ten of the previous 13 quarters. Now let’s explore analysts’ consensus estimate for GM’s Q2 2018 earnings.
Analysts’ estimates for Q2 2018 earnings
In Q2 2018, Wall Street analysts expect General Motors’ earnings to see fall YoY. According to estimates, its second-quarter earnings could be $1.86 per share. That reflects a decline of 1.6% from its adjusted EPS of $1.89 in Q2 2017. In contrast, analysts estimate GM’s Q3 2018 earnings to see a 23% YoY increase to $1.62 per share.
Weakness in earnings
US auto sales were at an all-time high in 2016 with 17.55 million vehicles sold. As a result, legacy automakers (XLY) GM, Toyota (TM), Ford (F), and Fiat Chrysler (FCAU) benefited from the strong demand. In order to maintain a positive trend in auto sales in 2018, automakers continue to offer big discounts on their vehicles. That could have a negative impact on GM’s second-quarter earnings.
In the next part, we’ll explore analysts’ recommendations for GM stock before its Q2 2018 earnings event.