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Analysts Expect General Motors’ Q4 Earnings to Fall

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Third-quarter earnings recap

In the third quarter, General Motors (GM) reported an adjusted EPS of $1.87, which is ~41.7% higher than its adjusted EPS of $1.32 in the third quarter of 2017. The company’s third-quarter adjusted earnings were also better than analysts’ estimates of $1.25

General Motors has reported a YoY (year-over-year) increase in its adjusted earnings in two of the last four quarters. Now, we’ll discuss analysts’ consensus estimates for General Motors’ fourth-quarter earnings.

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Analysts’ estimates

In the fourth quarter, analysts expect General Motors’ earnings to fall YoY. According to these estimates, the company’s fourth-quarter adjusted EPS could be ~$1.22—down ~25.9% from the adjusted EPS of $1.65 in the third quarter of 2017. Analysts expect General Motors’ fiscal 2018 earnings to fall 4.6% YoY to $6.32 per share.

What could hurt the earnings?

Since April, General Motors has stopped reporting its sales data on a monthly basis. General Motors’ peers (XLY) including Ford (F), Fiat Chrysler (FCAU), and Toyota (TM) continue to report their monthly sales data.

In the third and fourth quarter, General Motors’ Chinese market sales fell 14.9% and 25.4% YoY, respectively. In the last quarter, the company also reported a 2.7% fall in its home market sales. A massive drop in Chinese market sales in addition to weakening US sales could drive General Motors’ earnings lower in the fourth quarter.

Next, we’ll discuss analysts’ recommendations for General Motors stock before its fourth-quarter earnings.

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