GM Second Quarter Earnings Report

 

GM Reports Second-Quarter Net Income
of $2.9 Billion, Up 157 Percent

  • Strong EPS diluted of $1.81; record EPS diluted-adjusted of $1.86
  • Record net revenue of $42.4 billion, up 11 percent
  • Record EBIT-adjusted of $3.9 billion, up 37 percent
  • GM North America sets records for EBIT-adjusted of $3.6 billion, 1 percent margin
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DETROIT – General Motors Co. (NYSE: GM) today announced strong second-quarter net income to common stockholders of $2.9 billion, up 157 percent compared to $1.1 billion in the second quarter of 2015. Earnings per share (EPS) diluted was a strong $1.81, compared to $0.67 in the second quarter a year ago.

EPS diluted-adjusted was a record at $1.86, up 44 percent compared to $1.29 in the second quarter of 2015.

The company reported records for earnings before interest and tax (EBIT) adjusted of $3.9 billion and EBIT-adjusted margin of 9.3 percent. These compare to EBIT-adjusted of $2.9 billion and EBIT-adjusted margin of 7.5 percent in the second quarter of 2015, which included the impact of $0.3 billion restructuring costs.

“This was an outstanding quarter for GM,” said Chairman and CEO Mary Barra. “Our results were generated by strong retail sales in the U.S., record sales in China and a continued emphasis on improving the performance of our operations worldwide. We’ll continue to focus on driving profitable growth and leveraging our technical expertise to lead in the future of personal mobility.”

Net revenue of $42.4 billion was a record, compared to $38.2 billion in the second quarter of 2015. Holding exchange rates constant, net revenue was $5.0 billion higher than the second quarter of 2015.

 GM Results Overview (dollars in billions except for per share amounts and where noted)

  Q2 2016 Q2 2015
Global deliveries (millions of units) 2.4 2.4
Net revenue  $42.4 $38.2
Net income attributable to common stockholders  $2.9 $1.1
EPS diluted $1.81 $0.67
Impact of special items on EPS diluted $(0.05) $(0.62)
EPS diluted–adjusted $1.86 $1.29
EBIT-adjusted  $3.9 $2.9
% EBIT-adjusted margin 9.3 7.5
Automotive net cash flow from operating activities $5.0 $5.1
Adjusted automotive free cash flow $3.2 $3.3
% return on invested capital (ROIC) 30.5 23.4

 Segment EBIT-Adjusted Results

  • GM North America reported record EBIT-adjusted of $3.6 billion compared with $2.8 billion in the second quarter of 2015. For the quarter, EBIT-adjusted margin was a record 12.1 percent, compared to 10.5 percent a year ago.
  • GM Europe reported EBIT-adjusted of $0.1 billion compared with breakeven EBIT-adjusted results in the second quarter of 2015. This result is the first profitable quarter since the second quarter of 2011.
  • GM International Operations reported EBIT-adjusted of $0.2 billion compared with $0.3 billion in the second quarter of 2015. Results included China equity income of $0.5 billion in both periods.
  • GM South America reported EBIT-adjusted of $(0.1) billion, about equal with the second quarter of 2015.
  • GM Financial reported earnings before tax of $0.3 billion, compared with
    $0.2 billion in the second quarter of 2015.

Cash Flow and Liquidity

For the quarter, automotive cash flow from operating activities was $5.0 billion. Adjusted automotive free cash flow was $3.2 billion. GM ended the quarter with total automotive liquidity of $34.1 billion, and automotive cash and marketable securities of $20.1 billion.

“When you deliver cars, trucks and crossovers customers really value, and generate efficiencies across the enterprise, great results follow,” said Chuck Stevens, GM executive vice president and chief financial officer. “With our aggressive vehicle launch cadence and robust global industry sales, we are confident that we can continue to achieve strong financial performance.”

GM expects a higher proportion of volume from new or refreshed vehicles each year through 2020 compared to the prior five years, increasing to 40 percent of its total global volume, up from 26 percent in 2015.

2016 Outlook

Based on the company’s strong financial performance through the first half of 2016 and its current outlook for the second half of the year, GM now expects 2016 full year EPS diluted-adjusted to be $5.50 – $6.00, up from the previously announced $5.25 – $5.75 range.

Global Vehicle Sales

GM sold 2.4 million vehicles globally in the second quarter of 2016 to customers, about equal to the second quarter of 2015. Through June 30, the company sold 4.76 million vehicles globally.

In the U.S., GM sold 1.44 million vehicles in the first six months of the year, which included a retail sales increase of more than 1 percent. U.S. retail market share rose 0.4 percentage points through June, the largest retail share gain of any full-line automaker. In China, GM and its joint ventures delivered a record 1.81 million vehicles during the first half of the year, an increase of 5.3 percent. In Europe,

Opel / Vauxhall outperformed the industry with a 7-percent sales increase to 621,000 vehicles in the first half of the year.

 

Distribution of Summary Plan Description

The purpose of this communication is to advise you that beginning this week, GM benefit-eligible participants will be receiving a Summary Plan Description (SPD) applicable to benefits they may be eligible for. The SPD is an important document that tells participants what the plan provides and how it operates.

At a minimum of every 5 years, the Employee Retirement Income Security Act (ERISA) requires plan administrators to give plan participants in writing the most important facts they need to know about their retirement and health benefit plans including plan rules, financial information, and documents on the operation and management of the plan.

Depending on the participant’s preferred method of receiving plan information, the SPD will either be sent via Standard Mail or delivered electronically to the email address they previously provided. Mailings will be staggered, beginning this week and continuing over the next several weeks.

Any questions can be directed to the GM Benefits & Services Center at 1-800-489-4646 or see your Local Union Benefit Representative.

Employee Placement Update

  1. Year to date General Motors has relocated a total of 1,391 UAW-GM members.
    • 836 members within their Area Hire
    • 555 members in the Extended Area Hire
  2. Eligible UAW-GM members can visit http://www.uawgmjas.org and then click on Employee Placement to make an application to transfer.
  3. So far in 2016 General Motors has hired 2,097 permanent production members.
  4. Skilled Trades
  • Since the beginning of 2016 General Motors has hired 368 new UAW Represented, General Motors Skilled Trades personnel.
  • There are still many immediate Skilled Trades openings throughout the company and throughout the country. Look for postings inside the plant that list the sites with skilled trade openings.
  • Experienced crafts persons outside of UAW-GM can go to  gm.appone.com, click the link for ‘skilled trades jobs’ and search by trade classification and location to make an application. Die Makers, Electricians with PLC and Robotics experience, Metal Model makers and other engineering and experimental skilled trades are in high demand and have openings.