General Motors Company ($GM) Earnings (Q1 FY22)

 General Motors Company ($GM) Earnings and Opinion:


General Motors is a company in the Consumer Cyclical sector and operates in the Auto Manufacturers industry. The company designs, builds, and sells automobiles, parts, and accessories throughout the world. General Motors was founded in 1908 and is currently headquartered in Detroit, Michigan. The company was first traded on the stock market in 2010.

General Motors EPS and Revenue (Q1 FY22):

  • EPS of $2.09 beating expectations of $1.66
  • Revenue of $35.98B missing expectations of $37.11B
General Motors Q1 Highlights:
  • Net income of $2.94B
  • Net income margin of 8.2%
  • EBIT- adjusted margin of 11.2%
Opinion:
General Motors recently reported a mixed earnings report to kick off the first quarter of the 2022 fiscal year. The surprising part was to see the impressive beat GM had on the EPS expectations. The auto industry has been very shaky recently, due to the fact of the supply chain shortages and the semiconductor chip shortages. Companies are starting to become more and more innovative in the creation of newer car models. This comes hand in hand with the innovative vehicles coming with many semiconductor chips. However, environmental and economic factors have caused a shortage in this industry, and this has caused production levels to come down. The new vehicles being created have been down over the past year, which is causing the prices of these cars to rise and shun away buyers. Many newer model cars are being left abandoned, due to not having any replacement semiconductor chips. In turn, auto makers like GM have launched an EV unit. Many big auto makers are trying to stray away from gas powered vehicles, and are launching Electric Vehicles. They saw the recent success of Tesla, and now want to compete with the company. GM has seen some success with it already, they sold out of one of their EV models in minutes after taking pre-orders. There is a lot of built up suspense on these EV, and if they are successful, they can launch the company to new highs. A lot of uncertainty lies with a lot of these auto markers, that is why we are seeing poor performance with the stock performance. I currently have a small position in GM, and I'm looking at this as the sense of their EV future. I see a lot of possibilities of greatness with what they have working for them. I really like this for the EV side, but also for the fact that the auto maker is starting to really expand on sales outside of the United States as well. I am in GM for the long-term and I would love to see them evolve their EV sector into an industry giant. 


*Information from General Motors, Yahoo Finance, and Google
*Estimates from Zacks


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