General Motors Co.
) is set to report second-quarter 2014 results on Jul 24, 2014.
Last quarter, it posted a negative earnings surprise of 6.45%.
Let's see how things are shaping up for this announcement.
Factors to Consider this Quarter
General Motors reported sales of 2,505,889 vehicles globally in the
second quarter of 2014. This highlights a year-over-year increase
of 1.5%. The upside was driven by better sales in the large and
profitable automobile markets of the U.S. and China. Sales in the
U.S. augmented 7% while the same in China went up 8%. Also, the
automaker's sales in the first half of 2014 increased 1.4% to
However, General Motors has been facing the brunt of a delayed
recall of 2.6 million vehicles with defective ignition switches. In
addition, the company is recalling other vehicles in large numbers
as well. Consequently, General Motors will incur repairing charges
of around $1.2 billion in the second quarter. Moreover, strikes by
component suppliers have compelled the company to temporarily halt
production at its Port Elizabeth assembly plant in South Africa.
Our proven model does not conclusively show that General Motors is
likely to beat earnings this quarter. That is because a stock needs
to have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the
case here as you will see below.
Earnings ESP represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate. General Motors' Most
Accurate estimate stands at 62 cents while the Zacks Consensus
Estimate is pegged at 77 cents. Hence, the difference stands at
-19.48% for the company.
General Motors' Zacks Rank #3 (Hold) reduces the predictive power
of ESP. When combined with -19.48% ESP, it makes surprise
We caution against stocks with Zacks #4 and #5 Ranks (Sell rated
stocks) going into the earnings announcement, especially when the
company is seeing a negative estimate revisions momentum.
Other Stocks to Consider
Here are some companies you may want to consider as our model shows
that they have the right combination of elements to post an
earnings beat this quarter:
) with an earnings ESP of +2.08% and a Zacks Rank #1 (Strong Buy)
will be reporting second-quarter 2014 earnings on Jul 24, 2014.
) has an earnings ESP of +6.67% and a Zacks Rank #2 (Buy). The
company will be posting its second-quarter earnings on Jul 31,
Dana Holding Corporation
) has an earnings ESP of +5.77% and a Zacks Rank #2. The company
will release its second-quarter financial results on Jul 24,
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
GENERAL MOTORS (GM): Free Stock Analysis Report
GENTEX CORP (GNTX): Free Stock Analysis Report
MERITOR INC (MTOR): Free Stock Analysis Report
DANA HOLDING CP (DAN): Free Stock Analysis
To read this article on Zacks.com click here.