General Motors' (GM) Posts Strong Earnings, Bloomberg TV Weighs In

Bloomberg's Matt Miller joined Bloomberg TV's 'Bloomberg Markets' to comment and react to the second quarter earnings report form General Motors (GM).
By Giovanni Bruno ,

NEW YORK (TheStreet) -- General Motors (GM) - Get Report reported better than expected second quarter earnings before the market open today. GM posted earnings of $1.86 per share, beating analysts' estimates of $1.52 per share. Additionally, General Motors posted revenue of $42.4 billion, higher than Wall Street expectations of $38.91 billion.

Bloomberg TV's Matt Miller discussed GM today on "Bloomberg Markets" and what the earnings report is indicative of.

"GM has beaten estimates by at least 15% for five straight quarters in a row," Miller said.

However, Miller did note the company's diminished growth in U.S. sales which are expected to be lower than last year's all-time record. Moreover, should this decline come to fruition it would mark the first annual decline in U.S. auto sales in the past seven years.

"But in the face of this, GM was able to post record North American income fueled mainly by its truck sales. As American's preference for these light trucks (crossovers, and pickups) over cars is more lopsided than ever," Miller said, as trucks have now out sold cars consecutively for 39 months.

That being said, it wasn't just North America's results behind GM's second quarter financials.

"GM's international operations outsold the North American operations by 4.5 million vehicles in total. So it's important for them do well in the rest of the world," Miller said, however did relay some doubt internationally. 

"In Europe, the company did post earnings but only $137 million marking the first black ink in the region since 2011. Additionally, GM said that the U.K.'s decision to leave the EU could cost the company $400 million in the second half of the year," Miller told Bloomberg TV.

Shares of GM are lower 1.37% to $31.92 on Thursday afternoon. 

Separately, TheStreet Ratings rates General Motors as a "Buy" with a ratings score of "B-." This is driven by a number of strengths, which TheStreet Ratings believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks TheStreet Ratings covers.

The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, notable return on equity, attractive valuation levels and impressive record of earnings per share growth. TheStreet Ratings feels its strengths outweigh the fact that the company shows weak operating cash flow.

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. 

You can view the full analysis from the report here: GM

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