 |
|
COVID-19 hit GM second quarter results hard, as expected |
General Motors has booked a second quarter 2020 loss of US$0.8bn compared with a a $294m profit for the first quarter. Revenue was $16.8bn compared with $32.7bn in Q1.
Operating income was $2.4bn a year ago and revenue $36.1bn.
“We have a track record of making swift and strategic decisions to ensure our long-term success for the benefit of all our stakeholders. We will continue to drive the necessary change throughout the company to enable growth as we prepare to deliver a world with zero crashes, zero emissions and zero congestion,” said chairman and CEO Mary Barra in a statement.
GM said its Q2 results “demonstrated the resilience of the business, even while affected significantly by the pandemic”.
Chevrolet Silverado and GMC Sierra sales were strong, leading to year-over-year US market share growth, despite tight inventory. Solid demand translated to stronger average transaction pricing and lower incentives, with full-size pickup ATPs increasing $1,526 versus the first quarter.
Launch plans for full-size SUVs also remained on track, with the first customers taking deliveries in June.
Total income and EBIT-adjusted reflected the COVID-19 pandemic impact, with key drivers including a 62% drop in GMNA wholesales, a $0.2bn decline in GMI EBIT-adjusted and lower GM Financial EBT, partially offset by cost actions compared to last year.
GMNA results neared break even, demonstrating the effects of key actions taken the last several years. Performance in China improved on a sequential basis from Q1, with growing sales and equity income of $200million in Q2.
GM posted an EBIT adjusted loss of $0.1bn in North America, compared with $3bn of profit in Q1 2019, $0.3bn loss for international versus break even, $0.2bn loss for Cruise (0.3bn loss a year ago) and $0.2bn profit at GM Financial compared with $0.5bn in Q1 2019.
“Clearly, the second quarter was a challenge, but we achieved near break even EBIT-adjusted in North America, despite losing eight of 13 weeks of production. These results illustrate the resiliency and earnings power of the business as we make the critical investments necessary for our future,” said CFO Dhivya Suryadevara.
US Q2 vehicle sales declined about 34% year on year. Results were impacted by significantly reduced industry demand due to the COVID-19 pandemic and tight dealer inventories caused by the production shutdown in the first and second quarters. Overall sales showed signs of recovery – especially retail sales, which improved from April’s 35% decline to May and June, where year over year declines were around 20%.
No outlook was provided.
