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Analysts Expect General Motors’ Q2 2018 Earnings to Fall

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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.

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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.

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