General Motors Co. (GM - Analyst Report) recorded adjusted earnings of $1.7 billion or 97 cents per share in the third quarter of 2014, beating the Zacks Consensus Estimate of 95 cents per share. In comparison, the company generated earnings of $1.6 billion or 96 cents per share in the third quarter of 2013.

Adjusted results for the third quarter of 2014 exclude the unfavorable impact of $0.3 billion or 16 cents per share related to flood damages in the General Motors Technical Center in Michigan and long-lived asset impairments in Russia. Meanwhile, in the third quarter of 2013, the company recorded an unfavorable impact of $0.9 billion or 51 cents per share from special items.

Net income (on a reported basis) amounted to $1.4 billion or 81 cents per share, compared with $0.7 billion or 45 cents per share in the year-ago quarter. The third quarter 2014 results benefited from strong global sales and growing margins in North America and China, partially offset by challenges in Russia and South America.

Revenues in the quarter grew 0.8% year over year to $39.3 billion. However, revenues missed the Zacks Consensus Estimate of $39.8 billion.

Worldwide wholesale unit sales went down 5.9% to 1.48 million vehicles in the quarter. Worldwide retail unit sales rose 2.2% to 2.45 million vehicles. The automaker occupied a global market share of 11.5% during the quarter, down from 11.6% in the prior-year quarter.

Adjusted earnings before interest and tax (EBIT) dropped 11.5% to $2.3 billion from $2.6 billion in the third quarter of 2013. The decline was mainly due to $0.2 billion of restructuring costs in Europe included in the reported quarter.

The company logged $0.1 billion of restructuring costs in the year-ago quarter. Operating profit amounted to $1.2 billion, considerably down from a profit of $2.3 billion a year ago.

Segment Results

GM North America (GMNA) reported a 9.8% rise in revenues to $25.8 billion during the third quarter 2014. Adjusted EBIT improved to $2.5 billion from $2.2 billion in the third quarter of 2013.

GM Europe (GME) witnessed a 2.8% decrease in revenues to $5.2 billion. The region reported a wider year-over-year adjusted loss of $0.4 billion compared with $0.2 billion in the year-ago quarter.

GM International Operations (GMIO) results were disappointing. The operations reported a 22.9% decline in revenues to $3.7 billion. Adjusted EBIT was $0.3 billion, in line with the comparable quarter of 2013.
 

GM South America (GMSA) witnessed a 26.9% decrease in revenues to $3.2 billion. The segment reported break-even results in the quarter compared with a profit of $0.3 billion in the third quarter of 2013.

GM Financial reported an impressive 45.4% rise in revenues to $1.3 billion during the quarter. EBIT in the segment was $0.2 billion, in line with the third quarter of 2013.

Financial Position

GM had cash and cash equivalents of $18.1 billion as of Sep 30, 2014 compared with $20 billion as of Dec 31, 2013. Total debt (Automotive and Financial) increased to $41.1 billion as of Sep 30, 2014 from $36.2 billion as of Dec 31, 2013. Consequently, the debt-to-capitalization ratio increased to 48.9% as of Sep 30, 2014 from 45.9% at the end of 2013.

During the first nine months of 2014, the company had net cash flow of $6.9 billion from operating activities, down from $9.6 billion in the comparable year-ago period. Capital expenditures amounted to $5.1 billion in the reported quarter compared with $5.8 billion in the prior-year period.

GM currently holds a Zacks Rank #4 (Sell). Some better-ranked automobile stocks worth considering include Toyota Motor Corp. (TM - Analyst Report), Tata Motors Ltd. (TTM - Snapshot Report) and Commercial Vehicle Group Inc. (CVGI - Snapshot Report). Toyota and Tata Motors sport a Zacks Rank #1 (Strong Buy) while Commercial Vehicle is a Zacks Rank #2 (Buy) stock.