General Motors today posted EPS-diluted of $0.17 and EPS-diluted-adjusted of $0.62. The COVID-19 impact on EBIT-adjusted was $(1.4) billion. GM ended quarter with $33.4 billion in automotive liquidity as the global economy headed toward a depression. In March GM suspended production and cancelled earnings projections for the entire year.
First Quarter 2020 results
- EPS-diluted of $0.17 and EPS-diluted-adjusted of $0.62
- EPS diluted-adjusted includes a $(0.28) impact from Lyft and PSA revaluations
- Income of $0.3 billion, and EBIT-adj. of $1.2 billion, which includes a $(1.4) billion COVID-19 impact
- Revenue of $32.7 billion
- GM North America EBIT-adjusted of $2.2 billion
- GM Financial EBT-adjusted of $0.2 billion
First Quarter Sales
GM sales in the U.S. declined about 7%, from the effects of the pandemic. While sales have been impacted differently across geographies, for many dealers, demand for full-size trucks remained strong. Sales of GM’s full-size pickups rose about 27% year-over-year, with an apparent gain in retail market share. They captured ~41% of combined light- and heavy-duty segments in the first quarter (J.D. Power). In China, following the strongest sales impact in February, the industry started to pick up in March narrowing the monthly sales decline.
Considerable planning is underway to restart operations in North America. Based on conversations and collaboration with unions and government officials, GM is targeting to restart the majority of manufacturing operations on May 18 in the U.S. and Canada under extensive safety measures.
These global, standardized measures were learned from GM facilities in China; Korea; Kokomo, Indiana; Arlington, Texas; Warren, Michigan; Customer Care & Aftersales operations, as well as collaboration with union leadership and supplier partners.
“These procedures meet or exceed CDC and WHO guidelines,” GM said, “and are designed to keep people safe when they arrive, while they work and as they leave the facility.”
When GM suspended operations, it also moved to preserve its liquidity. GM ended the quarter with a strong $33.4 billion in automotive liquidity, including an approximately $16 billion draw-down from its revolving credit facilities. In addition, the company extended $3.6 billion under its three-year revolving credit agreement, and GM and GM Financial renewed their 364-day $2 billion revolver.
GM International Restructuring
In February, GM announced it will wind down engineering, vehicle sales – except for GM specialty vehicles – and design operations in Australia and New Zealand and retire the Holden brand by 2021. GM also agreed to sell its Rayong plant in Thailand to Great Wall Motors. As a result, the company recorded total after tax cash and non-cash charges of $0.7 billion in the First quarter.
An All-Electric Future?
During the pandemic, product development work on the company’s future EV and AV portfolios is progressing at a rapid pace. In addition, ongoing work continues at Detroit-Hamtramck to convert the facility to be GM’s first assembly plant fully devoted to EVs. (Consumer Feelings on Future Mobility Technologies Declines)
In March, GM shared its EV strategy and claimed that its technical expertise, flexibility, and scale will allow the company to lead in the future of EVs, producing sales quickly, efficiently, and profitably. This strategy includes a modular propulsion system and a highly flexible, third-generation global EV platform powered by the proprietary Ultium battery system.