General Motors’ (GM) CEO Mary Barra on Q2 2014 Results – Earnings Call Transcript

Source: Seeking Alpha


General Motors Company (NYSE:GM)

Q2 2014 Earnings Conference Call

July 24, 2014 10:00 AM ET


Randy Arickx – Executive Director, Communications and IR

Mary Barra – CEO

Chuck Stevens – EVP and CFO

Tom Timko – VP, Controller and CAO

Niharika Ramdev – VP Finance and Treasurer


Rod Lache – Deutsche Bank

Itay Michaeli – Citigroup

Brian Johnson – Barclays Capital

Colin Langan – UBS

John Murphy – Bank of America Merrill Lynch

Patrick Archambault – Goldman Sachs

Ryan Brinkman – JPMorgan

Adam Jonas – Morgan Stanley


Ladies and gentlemen, thank you very much for standing-by and welcome to the General Motors Company Second Quarter 2014 Earnings Conference Call. During this presentation, all participants are in a listen-only mode. Afterwards, we will conduct a question-and-answer session for analysts only. (Operator Instructions) As a reminder, this conference is being recorded on Thursday, July 24, 2014.

It’s now my pleasure to turn the conference over to Randy Arickx, Executive Director of Communications and Investor Relations. Please go ahead, sir.

Randy Arickx – Executive Director, Communications and IR

Thanks, operator. Good morning and thank you for joining us as we review the GM financial results for the first quarter of 2014. Our press release was issued this morning and the conference call materials are available on the Investor Relations Web site. We are also broadcasting this call via the Internet. Before we begin, I would like to direct your attention to the legend regarding forward-looking statements on the first page of the chart set. The content of our call will be governed by this language.

This morning, Mary Barra, General Motors’ Chief Executive Officer will provide opening remarks followed by a review of the financial results with Chuck Stevens, Executive VP and CFO.

After the presentation portion of the call, we’ll open the line for questions from the analyst community. Marry Barra will then conclude the call with some closing remarks. In the room today, we also have Tom Timko, Vice President, Controller and Chief Accounting Officer and Niharika Ramdev, Vice President, Finance and Treasurer, to assist in answering your questions.

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Now I’ll turn the call over to Mary Barra.

Mary Barra – CEO

Thanks, Randy and thanks to everybody for joining this call. On our last earnings call in April, I spoke about GM’s resiliency during a very challenging first quarter. As you all know, the ignition switch recall and difficult market conditions in some parts of the world put tremendous pressure on our bottom-line. Nevertheless, we remained profitable. Just as important, we also continued our steady investment in new products and we returned more than 480 million in capital to common shareholders, stockholders through our first quarter dividend. Years of hard work to improve our vehicles, our operations and the customer experience made this possible.

As expected the same issues continued into the second quarter, but once again we had strong operating performance and we earned a profit on both in EBIT adjusted and a net income basis and we stayed on our plan. I’ll speak to all these points starting on Slide 2, which presents a summary of our second quarter results. Then I’ll review the highlights that speak to the heart of our business, which is to build great products, satisfy its customers and do it very profitably.

At the top of Slide 2, you can see that we delivered 2.5 million units in the quarter. As we announced last week, this was our highest second quarter volume since 2005. Sales in North America and China, the two largest and most profitable markets in the world were up 6% and 8% respectively. However, this was offset to a large degree by declines in markets like Russia and Venezuela, where the industry is weak as well as the strategic decision we made to wind down Chevrolet Europe, this also had an impact on market share. Our global market share in the quarter was down three tenths of a point. However, market share in the United States was equal to a year ago. On a revenue basis, we improved our results by more than 570 million, based on large measure to improvements at GM Financial.

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Turning to the bottom-line, net income to income to common stockholders was 200 million or $0.11 per share. Combined the recall-related charges and special items we sited in our press release reduced net income by $0.91 per share in the quarter. Absent these items net income would have been about 1.7 billion in the quarter.

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