GM Earnings Report

[BacDoc]

Company is doing well and making money for shareholders, despite higher energy costs and commodity prices.

Earnings report was positive and helped by potential tariff rebates and margin increase to 10% from 8% previously.
This is interesting as the prices for parts and eaw materials have increased and the 6.2l engine problems were not mentioned and apparently small enough not to affect margins.
I would think that anything above 3-5% would adversely affect margins.

Earnings per share beat street expectations and guidance is positive though the next year.

Subscription revenue is up from last quarter and the services like Onstar and Supercruise have increased after the initial free trial period.
Over 40% of customers have continued subscription service and that is up significantly from previous years.

Also good news for consumers is the government mandates are easing up and hopefully that will result in better products.

If the engineering and quality control were managed as well as the rest of the company GM would be even more successful.

 

[BlackHC2025]

Fees/Subscriptions; the future of large profits for automakers.

 

[BacDoc]

Fees/Subscriptions; the future of large profits for automakers.

Exactly - every business is going to subscription revenue.
Guaranteed monthly revenue is awesome for the bottom line!

Most busy working people probably have no idea how much subscription/auto pay is coming out of credit cards and bank accounts.

It’s a big part of the Tesla business plan.
Companies like Tesla and Apple are getting subscription revenue from customers, businesses customers and app developers. GM is following this successful business model now.

 

[JayceeP]

Company is doing well and making money for shareholders, despite higher energy costs and commodity prices.

Earnings report was positive and helped by potential tariff rebates and margin increase to 10% from 8% previously.
This is interesting as the prices for parts and eaw materials have increased and the 6.2l engine problems were not mentioned and apparently small enough not to affect margins.
I would think that anything above 3-5% would adversely affect margins.

Earnings per share beat street expectations and guidance is positive though the next year.

Subscription revenue is up from last quarter and the services like Onstar and Supercruise have increased after the initial free trial period.
Over 40% of customers have continued subscription service and that is up significantly from previous years.

Also good news for consumers is the government mandates are easing up and hopefully that will result in better products.

If the engineering and quality control were managed as well as the rest of the company GM would be even more successful.

Did you listen to the analyst call? Wondering if they asked the executive team any questions about the 6.2 or even 3.0 issues.

 

[BacDoc]

Didn’t listen to the call but read and listened a couple of takes on the earnings report from the CNBC interview with some company executives and fund managers.
My Schwab platform has the bullet points on the report and conclusions/comments from Morning Star, CFRA, Blackstone etc.

No mention of any engine failure or warranty issues hitting revenue. The biggest downside was EV sales, increased parts and energy costs but nothing about product failures.
The fact that besides EV, the sales were strong across the line up and GM is still a major truck and large SUV market share.

 

[JayceeP]

Didn’t listen to the call but read and listened a couple of takes on the earnings report from the CNBC interview with some company executives and fund managers.
My Schwab platform has the bullet points on the report and conclusions/comments from Morning Star, CFRA, Blackstone etc.

No mention of any engine failure or warranty issues hitting revenue. The biggest downside was EV sales, increased parts and energy costs but nothing about product failures.
The fact that besides EV, the sales were strong across the line up and GM is still a major truck and large SUV market share.

Interesting. Says a lot really.

 

[BacDoc]

I thought so too.
Even if the engine failures were significant they would have to address that number.

Most earnings reports that are optimistic like GM recent, might throw the supplier under the bus or play down the number as similar to the industry.
The fact that the number was low enough that they didn’t even have to address it says a lot.

My deepest sympathies go to those who had the failures as the safety factor and economic hit is unacceptable but to the bottom line of GM it is not significant.
My guess is it’s similar to mitigation in the oil biz, sometimes something goes wrong and the fines and environmental cleanup is part of doing business in that sector.