China’s Economy Could Hurt General Motors’ Revenues in Q4



General Motors’ revenues

In the third quarter, General Motors (GM) revenues were ~$35.8 billion—up ~6.4% from $33.6 billion in revenues in the third quarter of 2017. The company’s revenues increased on YoY (year-over-year) basis after declining for five consecutive quarters. General Motors managed to beat analysts’ revenue estimates of $34.8 billion. Now, we’ll discuss what analysts expect for General Motors’ fourth-quarter revenues.

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Revenue estimates

Analysts expect General Motors’ fourth-quarter revenues to be $36.5 billion—down 3.3% compared to $37.7 billion the fourth quarter of 2017. Analysts expect the company’s fiscal 2018 revenues to remain slightly negative at $145.3 billion with an ~0.2% fall YoY. The negative trend is also expected to continue in the near future. Analysts’ estimates suggest a 0.7% fall YoY in General Motors’ first-quarter revenues.

Key factors

Auto companies (FXD) including General Motors, Ford (F), Tesla (TSLA), Fiat Chrysler (FCAU), and Toyota (TM) make a significant portion of their revenues from the US market. In the last few years, General Motors has been trying to expand its market share in China—the world’s largest auto market. In 2017, General Motors announced its plan to exit several markets including Europe, South and East Africa, and India. The move also impacted the company’s global sales volume and market share.

After registering positive YoY sales growth in the first half of 2018, General Motors’ Chinese sales turned negative in the second half of 2018 due to China’s slowing economy. Lower sales could impact the company’s total revenues in the fourth quarter. General Motors’ strong retail segment and its strong US truck sales could help it improve its revenues in the fourth quarter.


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