Yesterday all of the automakers reported April auto sales to great fanfare. GM sales were up 11% over last year. Their YTD unit sales are up 10%. The MSM has been touting the “strong” auto sales as proof the economy is recovering and consumers are flush with cash again from those non-existent jobs. If auto sales at GM are booming at double digit rates, why did their profit plunge by 14% in the 1st quarter? Inquiring minds want to know. Something doesn’t pass the smell test.
Here is a link to the results GM reported today:
Here are my comments/questions:
- How pitiful is it that a company with $36.3 billion in sales can only manage a $865 million profit? A 2.4% profit margin is a joke, especially after the American taxpayer ate their debt in their illegal reorganization.
- If their reported unit sales are up 10%, how did they manage to report 3% less revenue?
- Even though the MSM is reporting an auto recovery, GM managed to make $139 million less profit than 2012. This couldn’t be due to channel stuffing.
- Evidently GM is selling more cars for a lot less money. So let me get this straight. GM is stuffing inventory down the throats of its dealers. It is offering massive incentives to move its trucks. It is using Ally Financial to dole out subprime auto loans to 45% of the “purchasers” of their vehicles. And this constitutes an auto recovery.
- The good old balance sheet tells an interesting story. Even though revenue is falling, Accounts receivable surged by 20% in three months. GM wouldn’t be helping its dealers finance their bloated inventory, would they?
- The supposedly strong GM has $34 BILLION of pension and benefit liabilities on its books and only $38 billion of equity. Yeah, that will work out just fine.
GM’s results reveals that the MSM bullshit about a strong auto market is just another tired propaganda storyline. The auto sales are being generated by bad loans to deadbeats and huge incentives by the automakers that guarantee a loss on just about every car sold. Sounds like a great business plan.
GM Reports First Quarter Net Income of $0.9 Billion
DETROIT – General Motors Co. (NYSE: GM) today announced first quarter net income attributable to common stockholders of $0.9 billion, or $0.58 per fully diluted share. These results include a net loss from special items that reduced net income by $0.2 billion, or $0.09 per fully diluted share.
In the first quarter of 2012, GM’s net income attributable to common stockholders was $1.0 billion, or $0.60 per fully diluted share, including a net loss from special items of $0.6 billion or $0.33 per share.
Net revenue in the first quarter of 2013 was $36.9 billion, compared to $37.8 billion in the first quarter of 2012. Earnings before interest and tax (EBIT) adjusted was $1.8 billion, compared to $2.2 billion the first quarter of 2012. First quarter EBIT-adjusted results for 2013 include the impact of $0.1 billion in restructuring costs.
“The year is off to a solid start as we increased our global share with strong new products that are attracting customers around the world,” said Dan Akerson, GM chairman and CEO. “In addition, we saw progress in Europe thanks to strong cost actions and great vehicles like the Opel Adam and Mokka.”
GM Results Overview (in billions except for per share amounts)
|Q1 2013||Q1 2012|
|Net income attributable to common stockholders||$0.9||$1.0|
|Earnings per share (EPS) fully diluted||$0.58||$0.60|
|Impact of special items on EPS fully diluted||$(0.09)||$(0.33)|
|Automotive net cash flow from operating activities||$0.5||$2.3|
|Adjusted automotive free cash flow||$(1.3)||$0.3|
Beginning this quarter, the company will report segment revenues and profits based on the geographic region in which a vehicle is sold. Previously, segment results included the impacts of inter-segment sales and profits. Prior year segment results have been reclassified so all information is shown on a comparable basis. Financial results for Chevrolet Europe continue to be recorded in GM International Operations. Consolidated results are unaffected by this change.
- GM North America reported EBIT-adjusted of $1.4 billion, compared with $1.6 billion in the first quarter of 2012.
- GM Europe reported an EBIT-adjusted of $(0.2) billion, compared with $(0.3) billion in the first quarter of 2012.
- GM International Operations reported EBIT-adjusted of $0.5 billion, compared with $0.5 billion in the first quarter of 2012.
- GM South America broke even on an EBIT-adjusted basis, compared with EBIT-adjusted of $0.2 billion in the first quarter of 2012.
- GM Financial earnings before tax was $0.2 billion for the quarter, compared to $0.2 billion in the first quarter of 2012.
Cash Flow and Liquidity
For the quarter, automotive cash flow from operating activities was $0.5 billion and automotive free cash flow adjusted was $(1.3) billion. The change in year-over-year cash flow was primarily the result of lower earnings and a series of timing-related items that GM expects to reverse during the balance of the year.