GM’s cash flow this quarter was hurt by recalls and payments to suppliers.
General Motors Company (NYSE: GM) announced Q3 net income of $1.4 billion today, or $0.81 per diluted share. A net loss from special items – flooding at the Tech Center in Michigan and the collapse of the Russian market, the ongoing European losses – reduced net income by $300 million, or $(0.16) per share. Recall costs also hurt the balance sheet.
All of GM’s profit came from North America, with a profit margin improving to 9.5%, up from 7.5% a year earlier, largely because of tuck sales. Europe, International Operations, South America and GM Financial down or flat year-over-year.
Net revenue for Q3 2014 was $39.3 billion, compared to $39.0 billion in the third quarter of 2013. In the first nine months of 2014, revenue rose to $116.3 billion, up from $114.9 billion in the same period a year ago. GM lost market share, -0.1% to 15.4% in an expanding global market.
In Q3 of 2013, GM’s net income was $0.7 billion, or $0.45 per share, which included a net loss from special items that reduced net income attributable to common stockholders by $0.9 billion, or $(0.51) per diluted share.
Cash flow this quarter was pommeled by recalls and payments to suppliers. During Q3 of 2014, automotive cash flow from operating activities was $0.7 billion and automotive free cash flow was in the dumpster at $(0.8) billion. This was down from $1.3 billion a year ago, a -$2.1 billion swing in the wrong direction. The decline in cash was “related to repairing recalled vehicles, including costs to expedite parts to dealers.”
Results by region were:
- GM North America reported EBIT-adjusted (earnings before interest and taxes) of $2.5 billion, compared with EBIT-adjusted of $2.2 billion in the third quarter of 2013.
- GM Europe reported EBIT-adjusted of $(0.4) billion which includes restructuring costs of $(0.2) billion, compared with EBIT-adjusted of $(0.2) billion in the third quarter of 2013.
- GM International Operations reported EBIT-adjusted of $0.3 billion, compared with EBIT-adjusted of $0.3 billion in the third quarter of 2013.
- GM South America reported break-even results, compared with EBIT-adjusted of $0.3 billion in the third quarter of 2013.
- GM Financial reported earnings before tax of $0.2 billion, compared to
$0.2 billion in the third quarter of 2013.
Vehicle launches coming in Q4 include the recently introduced GMC Canyon and Chevrolet Colorado mid-sized pickups in the U.S. (already recalled with a stop sale), the Cadillac ATS-L, Buick Envision and Chevrolet Cruze in China, and the Opel Corsa in Europe.
