General Motors Company is slated to release its second quarter financial results on Thursday. In the previous quarter, the company brought in a positive earnings surprise of 24.75 percent.
According to market analysts, General Motors is likely to exceed earnings forecasts this quarter. Experts expect the company to post earnings of $1.49 per share. The consensus analyst estimate ranges between $1.31 and $1.61, while the average market range for revenue is $38 billion to $39.1 billion.
The company’s retail sales in the United States rose 1.3 percent year over year to 1,137,101 units in the first half of 2016. In addition, General Motors and its joint investments in China delivered a 5.3 percent growth in sales to 1,810,476 units during the period. Higher sales should bring better revenues for the company. The automaker is also concentrating on investment in advance technologies and vehicles, which could ensure sustained growth.
General Motors last closed at $30.77, putting the company’s market capitalization around $47.78 billion. Analysts have set the company’s twelve month price target at $36.69. Shares of General Motors fell -13.54 percent from its best level within 52 weeks and advanced progressed -7.23 percent this year. The stock recently traded in a range of $30.57-$30.98, with a volume of 8,422,615 shares.
Effect of Brexit on GM’s Business
Most of GM’s revenues come from the United States, however, Europe has also been one of the major markets for the company since it started. While analysts don’t expect any immediate change in the automaker’s business in Europe, Britain’s vote to leave the EU could have an adverse effect on European consumer sentiment progression.
Looking at consumer behavior toward the auto industry, gloomy consumer sentiments are usually followed by lower demand. Therefore, General Motors might make a few changes in its business strategy in the United Kingdom and Europe.
General Motors has five vehicles with some form of electrification in its US product portfolio, which includes the second generation Chevrolet Volt that the company launched last year.
Moreover, the automaker plans to introduce an all-electric Chevrolet Bolt model next year. The vehicle, which was valued at $37,500 before federal incentives, will have over 200 mile range per charge. The Chevrolet Bolt will be a mass-market electric vehicle. General Motors is expected to start the production of the vehicle in 2016 at the company’s Orion assembly facility.
An update on the company’s electric vehicle development is significant, particularly since Tesla is ready to ensure well-timed production and deliveries of its first mass-targeted Model 3 EV.
GM’s Ignition Switch Crash Continues
Within the past two years, General Motors disclosed billions of dollars of charges linked to its defective ignition switch scandal. These charges depicted the cost of recalling millions of vehicles, payments to a victim compensation fund, as well as a $900 million settlement with the Department of Justice.
The company seems to be moving past the issue by the end of 2015. However, a federal appeals court reversed a 2015 bankruptcy court ruling that had prevented customers from filing a lawsuit against General Motors over the damages that happened ahead of the company’s 2009 bankruptcy filing. This situation could apparently open up the automaker to billions of dollars of new claims.
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