General Motors CFO Explains Earnings Miss

General Motors Company (NYSE: GM) reported first-quarter earnings Thursday. EPS for the company came in at $0.86, which was below analysts' estimates of $0.96.

General Motors CFO Chuck Stevens was on CNBC recently to weigh in on the earnings.

South America And Tax Rate

"From a EPS perspective [...] largely driven by two issues," Stevens said. "Number one, we were spot on when you look across the world from an EBITDA or a profitability perspective – with the exception of South America.

"So, I think about a half of the $0.10 miss was related to South America, clearly a more challenging environment than perhaps the analysts expected there."

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He continued, "The other half is really tax rate. We had a higher effective tax rate in the first quarter than the analysts expected, and frankly, as we go through the rest of the year we would expect that to moderate and be back in the mid-20 range."

Growth In North America

Stevens was asked if profits of $2.2 billion are as good as it gets for General Motors' investors, or if there could be better times ahead. He replied, "I think there are significant catalysts still [...] to drive improved both consolidated earnings and earnings in North America, and we have talked about them before.

"Our product launch, Cadence, is going to be exceptionally strong, not only in North America, but in other key markets like Europe and China.

"Over the last four quarters, we have earned about 9 percent on core operating performance in North America. We are very constructive on our 10 percent EBITDA margin objective in 2016, " Stevens concluded.

 
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