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Benzinga
  • 3 years ago
General Motors Company (NYSE:GM) reported second-quarter FY23 sales growth of 25% year-on-year to $44.75 billion, beating the analyst consensus of $42.64 billion.

Q2 deliveries registered an 11.5% increase Y/Y to 1.58 million units, with North America climbing 17.2% to 805,000 units and China climbing 8.7% to 526,000 units.

Costs and expenses for the quarter rose 25% Y/Y to $41.9 billion.

Operating income for the quarter rose 33% Y/Y to $2.8 billion, with an operating margin of 6.2%.

Net income margin expanded 100 basis points Y/Y to 5.7%.

Adjusted EBIT for the quarter grew 38% to $3.23 billion with an adjusted EBIT margin of 7.2%.

The company held $32.63 billion in cash and equivalents as of June 30, 2023.

The cash provided by operating activities for six months totaled $10.7 billion. The automotive operating cash flow was $9.3 billion, and the adjusted automotive free cash flow totaled $5.5 billion.

Adjusted EPS of $1.91 beat the analyst consensus of $1.85.

Outlook: General Motors raised its FY23 net income outlook from $8.4 billion-$9.9 billion to $9.3 billion-$10.7 billion.

It raised FY23 adjusted EBIT outlook from $11 billion-$13 billion to $12 billion-$14 billion.

It raised FY23 adjusted automotive free cash flow outlook to $7 billion-$9 billion (prior $5.5 billion-$7.5 billion).

Price Action: GM shares are trading higher by 1.78% at $39.99 in premarket on the last check Tuesday.
Transcript
00:00 All right, let's move over. Let's go to General Motors. So get those motors started EPS coming in here at a dollar
00:07 91 beating the dollar 85 estimate sales of
00:10 44.75 billion beat the
00:13 42.64 billion estimate GMC's fiscal year
00:17 23 capex at 11 billion to 12 billion versus the prior outlook of 11 billion to a high end of 13
00:26 I see General Motors. It did get a little pop on this
00:30 But one thing that I'm and I've been stating this multiple times guys
00:34 I think we really need to watch out for the UAW
00:38 Strike news. Yeah, usually strike against one automaker
00:43 They don't they don't usually go against all three so we don't know which one they're gonna go after
00:48 It's at Ford is this Atlantis is a GM
00:51 One thing that I'll also mention is the big battle here now is more the EV
00:57 Factories that are being built by these legacy automakers
01:00 So what ends up happening is they're gonna get paid about one-third of the amount that a senior at an regular
01:08 auto assembly right now gas
01:10 Auto assembly would be getting paid and so right now it's that battle of wages also going into the EV
01:17 Factories that are gonna be battling because they want to get paid the same amount
01:21 But one thing I also saw was that it takes about one-third less of the amount of labor
01:28 To make that EV then it does that gas combustible engine
01:32 Vehicle and so I think at this point there's a big battle going on and why because the legacy automakers
01:39 They want their margins high on EVs and they already have low margins if they give it up in labor
01:46 They won't have margins. So this is a big battle
01:49 That's gonna take a while to kind of decipher and September 18th is the deal
01:55 Contract negotiations. That's when they end if nothing happens by that time. You'll probably see a strike
02:01 You said September 18th September 18th. It's a ways away area, but it's a good point here Mitch
02:08 I honestly don't like the price action
02:10 So I don't like that it's beat, you know, and then earnings were fine
02:14 But we're leaking here and now we're barely up. I hate seeing that
02:17 I'm long the stock in the long-term portfolio. I sold half of it
02:22 I'm like, I kind of want to sell it all but I kind of had it, you know 32 33
02:26 I picked it up, you know right at the bottom really and I'm like, you know what, you know
02:30 You want to have some stocks though, and I think General Motors a good company long term
02:34 I do I mean, I think Tesla's better company, but you know, it's like eight times earnings or nine times earnings
02:41 But again cyclical so if we go into a downturn that you know could go down
02:45 Most of me wants to sell this position and get out of it today. Part of me is just saying stop trading your long-term portfolio
02:51 So I've stuck here I I don't know what to do. What should I do? Should I stop my GM chat?
02:57 Let me know what to do. I've got half my position left for my original GM purchase. I'm up pretty solidly in it
03:03 I don't like the price action here, but maybe I should just hold on long term even if it drops a couple bucks
03:08 Maybe I should just stomach it
03:11 bill says sell
03:13 Chad I'm asking you you guys are making the decision what I'm gonna do with my GM position today. What?
03:17 Around your entry. Yo, she says dump. I was in like 32 and a half maybe 33 that always matters to me. It's
03:25 Yeah
03:28 Calls isn't a bad idea. Do you know that's not a bad idea? I could sell some cover call
03:34 Have you ever seen a company?
03:37 Beat beat beat beat. I mean they've missed one
03:41 Yeah
03:44 I know since April since
03:47 since the middle of
03:50 2015 love look at this. It doesn't get the love. Um
03:53 Bob or Dennis be a moron put more on and more on why more I don't like averaging up
03:59 The saying Joe that you've given me all these years is never frown average down
04:06 Don't screw up. Don't average up. That should be other say
04:09 Averaging up I did I remember on selge and I know
04:14 We're almost to a loser
04:17 Up thing. I don't know
04:20 I think one thing that we got to remember also is that at the end of the day the high interest rates
04:24 It's not the year for seeing massive adoption of EVs
04:28 I think what you're gonna need to see is even more government incentive come probably from fiscal policy in
04:34 24 or 25 for these vehicle companies to really take off.
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