GM Reports Profit Boost As Sales, Market Share Shrinks

General Motors’ first-quarter earnings report revealed turmoil in international markets and a shrinking presence in North America, but net income rose to $2.1 billion, up from $1.1 billion a year ago, and adjusted earnings per share ($1.41) beat out estimates of $1.11. Still, that wasn’t enough to stop its stock from sliding in pre-market trading, as revenue of $34.9 billion undercut analyst estimates of $35.28 billion. Pre-tax earnings fell 11 percent.

In its report, GM wanted to talk about trucks. You know the ones — the revamped 2019 Silverado and Sierra 1500 crew cabs, now featured in half of the pop-up ads on your author’s computer and phone, advertising 0% financing.

Trucks are key to the company’s health, given how much it relies on its home market. The automaker reports average transaction prices $5,800 higher than the crew cabs the new models replaced. Production of regular cab and extended cab pickups began in March, GM said, with revamped heavy duty models arriving later this year.

GM Chief Financial Officer Dhivya Suryadevara claimed the company’s ongoing restructuring efforts saved the automaker $400 million in Q1 2019, though a sales slump in China and pressures elsewhere conspired to sink revenue at home and abroad. In China, a key growth market for GM, income fell 37 percent to $376 million, with sales falling 18 percent from the same period in 2018.

North American revenue dropped 1.4 percent compared to Q1 2018, with margins falling from 8 percent to 6.9 percent. Income fell $300 million to $1.9 billion. In the U.S., sales fell 7 percent in the first quarter while global sales declined by 10 percent.

Market share? That dropped, too, from 17 percent to 16.1 percent in the United States. Globally, GM’s share fell from 11.4 percent to 10.6 percent. This year has already seen GM kill off the Chevrolet Cruze, Volt, and Buick LaCrosse, with the Cadillac XTS and perhaps the Chevrolet Sonic to follow. Interestingly, U.S. pickup market share fell from 31.9 percent to 28 percent between the first quarter of 2018 to 2019. We’ve already told you how Ram kicked the Silverado to third place in the U.S. sales standings.

Amid healthy competition from revamped rivals, GM hopes to reclaim more of the market with a full line of half-ton pickups and its looming next-gen HDs. Still, many feel the new trucks should be performing better. GM truck sales fell in the first quarter as inventory rose.

Here’s a 12-month moving average of U.S. Silverado and Sierra sales combined. There’s one line missing from that chart which is my wholesale estimates for clients.

I’d love to hear GM talk themselves out of that decline despite newly redesigned trucks. pic.twitter.com/0EMY52v00p

— Daniel Ruiz (@DRuizG80) April 30, 2019

Other data shows fleet sales rising from 23 percent of total U.S. sales in Q1 2018 to 25 percent in the most recent quarter. Average incentive spend per vehicle fell $236 to $4,589.

[Images: General Motors]