Business
The Cyclical Nature of General Motors
General Motors feels the need to go above analyst expectations as they reported a total revenue of $37.3 billion and adjusted earnings per share of $1.26. This lift was boosted by strong sales in North America together with their generation for some growth in Europe.
Despite this report, the stock still barely went higher. Investors are worried that the auto sales advancement won’t last long due to the cyclical nature of the auto sales itself. While North American sales hit records, operating margins on the said continent went slightly lower from the previous year.
Meanwhile, South American operations are still standing on the same spot with problematic atmosphere among major economic weakness on the continent.
Lastly, General Motors chose not to lift its full-year adjusted earnings guidance of $5.25 to $5.75 a share despite the good news of its results. GM’s approach is giving allowances to investors who are having a mindset that auto industry might have a sharp hit upon its cycle.
