General Motors (NYSE: GM) reported its second-quarter earnings, and the results beat expectations on both the top and bottom lines.
In an interview on CNBC, CFO Paul Jacobson called the company’s stock a “bargain,” even though the share price has risen by more than 40% over the past year
Is he right? There are certainly some good reasons to believe GM is extremely cheap right now, but there are also a few not-so-positive things to keep in mind. Here’s a rundown of GM’s second-quarter results, the case for why the stock is an incredible bargain, and the important things to watch going forward.
An extremely solid quarter In the second quarter, GM generated $48 billion in revenue, about a billion dollars more than analysts had expected, and adjusted earnings per share (EPS) beat by a wide margin. Automotive free cash flow of about $5 billion was 78% higher than a year ago. One particularly impressive statistic Jacobson pointed out in the conference call was that “Our first-half earnings per share is 25% higher than the first half at any time in our history.” Plus, the automaker increased its full-year guidance for adjusted EPS, automotive free cash flow, and several other profitability metrics.