General Motors CFO: South America Sales And Higher Effective Tax Rate Responsible For Earnings Miss

General Motors Company GM reported first quarter earnings earlier on Thursday. EPS for the company came 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, I feel 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 and clearly a more challenging environment than perhaps the analysts expected there.”

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 have expect that to moderate and to be back in the mid-20 range.”

Growth In North America

Stevens was asked if profits of $2.2 billion is as good as it gets for General Motors investors or there can be better times. He replied, “I think that there are significant catalysts still fill to drive improved both consolidated 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 in core operating performance in North America. We are very constructive on our 10 percent EBITDA margin in 2016,” Stevens concluded.