General Motors Co. (NYSE: GM) today reported strong earnings growth for the second quarter with net income attributable to common stockholders of $1.1 billion, or $0.67 per diluted share, which included a $1.1 billion loss from special items before tax, or $(0.62) per diluted share. Earnings before interest and taxes (EBIT) adjusted increased to $2.9 billion and EBIT-adjusted margin grew to 7.5 percent.
- EPS of $0.67; EPS adjusted for special items of $1.29 up 122 percent
- North America achieves quarterly records for EBIT-adjusted of $2.8 billion and
EBIT-adjusted margin of 10.5 percent
- Company reaffirms 2015 outlook for improved EBIT-adjusted and EBIT-adjusted margin, compared to 2014
“The first two quarters of the year were strong as we fully capitalized on a robust North American industry and maintained our strength in China, despite the challenging conditions in that market,” said GM CEO Mary Barra. “We said our goal was to improve our earnings and margins this year, and we are on-plan. Consistent with that, we believe our results in the second half of the year will be even better than the first half, and we’re confident we will meet our 2016 targets.”
Special items before tax in the quarter included $0.6 billion related to a previously announced currency devaluation in Venezuela, $0.4 billion for asset impairments primarily for GM Thailand, and $0.1 billion for an adjustment to the estimated cost of the ignition switch compensation program.
Net revenue in the second quarter of 2015 was $38.2 billion, compared to $39.6 billion in the second quarter of 2014. The change in revenue is more than attributed to a negative net foreign currency exchange impact. Holding exchange rates constant, net revenue was $0.9 billion higher than the second quarter of 2014.
“Our plan is generating results and giving us momentum,” said Chuck Stevens, executive vice president and chief financial officer. “Record margins in North America and strong margins in China produced a second quarter that demonstrates the earnings power of this company. We expect continued strong performance in these key markets.”
GM Results Overview (in billions except for per share amounts and percentages)
|Q2 2015||Q2 2014|
|Net income attributable to common stockholders||$1.1||$0.2|
|Earnings per share (EPS) diluted||$0.67||$0.11|
|Impact of special items on EPS diluted||$(0.62)||$(0.47)|
|EPS diluted – adjusted||$1.29||$0.58|
|% EBIT-adjusted margin||7.5||3.4|
|Automotive net cash flow from operating activities||$5.1||$3.6|
|Adjusted automotive free cash flow||$3.3||$1.9|
|% Return on Invested Capital (ROIC)||23.4||14.7|
Segment EBIT-adjusted Results
- GM North America reported EBIT-adjusted of $2.8 billion with an EBIT-adjusted margin of 10.5 percent. These results included the impact of $0.2 billion for restructuring costs. This compared with EBIT-adjusted of $1.4 billion in the second quarter of 2014, which included the impact of recall-related costs of $1.0 billion.
- GM Europe reported EBIT-adjusted of $(0.0) billion. This compares with EBIT-adjusted of $(0.3) billion in the second quarter of 2014, which included $0.2 billion for restructuring costs.
- GM International Operations reported EBIT-adjusted of $0.3 billion, compared to $0.3 billion in the second quarter of 2014. Results included China equity income of $0.5 billion, which generated a 10.2 percent net income margin.
- GM South America reported EBIT-adjusted of $(0.1) billion, compared with EBIT-adjusted of $(0.1) billion in the second quarter of 2014.
- GM Financial earnings before tax was $0.2 billion for the quarter, compared to $0.3 billion in the second quarter of 2014.
Cash Flow, Capital Return, Liquidity
Second quarter automotive cash flow from operating activities of $5.1 billion and adjusted automotive free cash flow of $3.3 billion, were up from $3.6 billion and $1.9 billion a year ago, respectively.
Year-to-date through July 21, GM has returned more than $3.1 billion of cash to shareholders through share repurchases of $2.1 billion and dividends of $1.1 billion.
GM ended the quarter with strong total automotive liquidity of $34.9 billion. Automotive cash and marketable securities was $22.8 billion compared with $25.2 billion at year-end 2014.