Biker16 Posted February 3, 2016 Share Posted February 3, 2016 (edited) GM profits soar on strong truck sales, resilience in China Mike Colias RSS feed Automotive News | February 3, 2016 - 7:30 am EST -- UPDATED: 2/3/16 8:41 am ET - adds details DETROIT -- General Motors today posted pretax operating profit of $10.8 billion for 2015 -- including $2.8 billion in the fourth quarter -- driven by booming sales of pricey SUVs and pickups and strong earnings in China despite the slowing market there. The full-year operating profit excluding one-time items -- the figure that GM says best reflects its underlying performance -- marked a 67 percent jump from 2014 and was the highest amount since before the company’s 2009 bankruptcy. (A spokesman couldn’t confirm whether that number eclipsed the record annual profit of pre-bankruptcy GM). GM’s fourth-quarter pretax operating profit excluding one-time items rose 15 percent to $2.8 billion. That was equal to $1.39 a share, vs. Wall Street forecasts of $1.21 a share. Net income for the September-to-December period was $6.27 billion, inflated by a gain of about $3.9 billion from the favorable tax treatment on the reclassification of assets in certain European markets. http://www.autonews.com/article/20160203/OEM/160209936/gm-profits-soar-on-strong-truck-sales-resilience-in-china Edited February 3, 2016 by RichardJensen Quote Link to comment Share on other sites More sharing options...
aneekr Posted February 3, 2016 Share Posted February 3, 2016 (edited) GM's EBIT adjusted margin of 7.1% in FY 2015 is a significant improvement from last year and comparable to Ford's FY 2015 figure of 7.2%. As with the automotive industry in general, it remains to be seen if these results for GM can be sustained throughout FY 2016 amid forecasts of tepid economic growth in the USA and China. Edited February 3, 2016 by aneekr Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted February 3, 2016 Share Posted February 3, 2016 Okay. We need to unpack some things. First of all, GM, like FCA is reporting EBIT, which is--as I mentioned in the FCA thread--a bit deceptive. It's not as deceptive with GM as it is with FCA, however I have issues with a company treating interest expense as though it were insignificant when they carry billions of dollars in debt in a profoundly cyclical industry. GM's GAAP net operating income before taxes was $4.9B, by comparison Ford's (factoring in their much larger credit arm) was $8.05B. GM had a lot of special items on both sides of the ledger last year; in addition to massive ongoing ignition switch costs (over $1.3B), they received a big pile of favorable tax items. GM still has over $20B in unfunded pension obligations. So I'm not ready to buy into GM's heavily massaged numbers. They had a good year, but any time a company starts prominently featuring results that are "adjusted" and "EBIT", beware. 1 Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted February 3, 2016 Share Posted February 3, 2016 GM's EBIT adjusted margin of 7.1% in FY 2015 is a significant improvement from last year and comparable to Ford's FY 2015 figure of 7.2%. Of course, Ford's number isn't "EBIT-adjusted". They include their interest expense in the results they promote. 1 Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted February 3, 2016 Share Posted February 3, 2016 And a reminder Biker: This is not the first time you've been dinged for posting full A/N articles here. Knock it off. Quote Link to comment Share on other sites More sharing options...
atomcat68 Posted February 3, 2016 Share Posted February 3, 2016 Okay. We need to unpack some things. First of all, GM, like FCA is reporting EBIT, which is--as I mentioned in the FCA thread--a bit deceptive. It's not as deceptive with GM as it is with FCA, however I have issues with a company treating interest expense as though it were insignificant when they carry billions of dollars in debt in a profoundly cyclical industry. GM's GAAP net operating income before taxes was $4.9B, by comparison Ford's (factoring in their much larger credit arm) was $8.05B. GM had a lot of special items on both sides of the ledger last year; in addition to massive ongoing ignition switch costs (over $1.3B), they received a big pile of favorable tax items. GM still has over $20B in unfunded pension obligations. So I'm not ready to buy into GM's heavily massaged numbers. They had a good year, but any time a company starts prominently featuring results that are "adjusted" and "EBIT", beware. Of everything, I'd lose the most sleep over the unfunded pension funds if I were running GM. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted February 3, 2016 Share Posted February 3, 2016 Of everything, I'd lose the most sleep over the unfunded pension funds if I were running GM. They probably don't. If things go south, that'll all get dumped on the Feds. But it's very irresponsible to conduct business that way. Quote Link to comment Share on other sites More sharing options...
Biker16 Posted February 3, 2016 Author Share Posted February 3, 2016 And a reminder Biker: This is not the first time you've been dinged for posting full A/N articles here. Knock it off. Sorry about that. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted February 3, 2016 Share Posted February 3, 2016 Sorry about that. OTOH, you can insert press releases in full. 1 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted February 4, 2016 Share Posted February 4, 2016 (edited) OTOH, you can insert press releases in full. good idea, we sould remember that with reporting company results How many sales an resources did aaGM have to burn through to get an an EBIT slightly bigger than Ford Edited February 4, 2016 by jpd80 Quote Link to comment Share on other sites More sharing options...
blazerdude20 Posted February 4, 2016 Share Posted February 4, 2016 OTOH, you can insert press releases in full. Is there a guideline for that? Lol. Quote Link to comment Share on other sites More sharing options...
BrewfanGRB Posted February 5, 2016 Share Posted February 5, 2016 Is there a guideline for that? Lol. Press releases are intended for public release and distribution at no cost. Posting a full article on a board is understood to not be "fair use". Quote Link to comment Share on other sites More sharing options...
jpd80 Posted February 5, 2016 Share Posted February 5, 2016 (edited) So, what is the main difference between "EBIT Adjusted" and the figures Ford announced as Pre-Tax? Is GM hiding negative Special items or are they positive one time additions? Does GM also include the interest it pays on its loans or is that reported differently? Did I miss something Richard may have already explained in another thread? Edited February 5, 2016 by jpd80 Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted February 5, 2016 Share Posted February 5, 2016 So, what is the main difference between "EBIT Adjusted" and the figures Ford announced as Pre-Tax? Is GM hiding negative Special items or are they positive one time additions? Does GM also include the interest it pays on its loans or is that reported differently? Did I miss something Richard may have already explained in another thread? The big thing is interest. Ford generally minimizes special items in their releases, and I've long since given up griping about that because everybody does it. But what EBIT and its more pernicious cousin EBITDA (earnings before interest, taxes, depreciation and amortization) do is minimize or obfuscate normal--and perhaps significant--aspects of a going concern. Granted, GM had net interest income last year (as did Ford), but that's not typically the case, and in GM's case they're carrying less debt than Ford, so their interest expense is going to be lower (it was $400M last year vs. nearly $800M for Ford), but it's a bad habit to get into. Quote Link to comment Share on other sites More sharing options...
twintornados Posted February 5, 2016 Share Posted February 5, 2016 The big thing is interest. Ford generally minimizes special items in their releases, and I've long since given up griping about that because everybody does it. But what EBIT and its more pernicious cousin EBITDA (earnings before interest, taxes, depreciation and amortization) do is minimize or obfuscate normal--and perhaps significant--aspects of a going concern. Granted, GM had net interest income last year (as did Ford), but that's not typically the case, and in GM's case they're carrying less they unloaded debt through bankruptcy than and Ford didn't, so their interest expense is going to be lower (it was $400M last year vs. nearly $800M for Ford), but it's a bad habit to get into. . There ya go....fixed. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted February 5, 2016 Share Posted February 5, 2016 (edited) And as we know GM will always outperform Ford in the good times, they should do because of the greater footprint. How long can we expect these favorable economic conditions to continue, is there an inevitable slow down coming? Should we be concerned about the way GM and Ford are spending their present income? Are they focusing on the right areas going forward or are there some low percentage plays? Edited February 5, 2016 by jpd80 Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted February 5, 2016 Share Posted February 5, 2016 And as we know GM will always outperform Ford in the good times Typically they haven't over the past 25 years. And based net income before taxes, they didn't last year either. 1 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted February 5, 2016 Share Posted February 5, 2016 Typically they haven't over the past 25 years. And based net income before taxes, they didn't last year either. Ok maybe I should have worded that differently, GM likes to present that image of beating rivals like Ford by manipulation of results? Quote Link to comment Share on other sites More sharing options...
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