Sales of GM pickups like this GMC Sierra Denali were strong in the third quarter, likely generating good profits. But a couple of big special items related to GM's recall scandal will hurt the headline number. Image source: General Motors.

It's earnings season! Veteran investors know what that means: A slew of quarterly reports from public companies of all sizes.

For long-term investors, a single quarterly earnings report doesn't usually mean a whole lot. It's the trend over time that really matters. Any one report might lead to some near-term volatility -- and while that can be good or bad, it doesn't much matter for someone whose horizon is measured in years.

But that said, it's important to keep an eye on one's investments if only to spot trends (or changes in trends) as they emerge. General Motors (NYSE:GM) is set to report its third-quarter earnings on October 21. Here's what investors will be looking for when the General releases its report.

On average, analysts are expecting GM to post earnings of $1.18 per share on revenue of $38.58 billion. That revenue estimate is 1.7% below GM's year-ago sales ($39.26 billion), but the profit would represent an increase: GM earned $0.97 per share a year ago.

Of course, that estimate excludes one-time charges, and GM will have a couple of big ones this time around. 

The costs of the recall scandal will hit net earnings once again
GM has said it will take two big charges against its third-quarter earnings. Both are related to the fallout from its 2014 recall scandal. GM said on September 17 that it had settled some litigation related to the defective ignition switches that are connected to over 100 deaths, and it would take a $575 million charge against third-quarter earnings for that settlement.

It also reached an agreement with the U.S. Department of Justice last month. Under the agreement, GM will avoid prosecution for crimes related to the lapses around the recalls if the company complies with a series of conditions for three years. One of those conditions: payment of $900 million to the government. GM has already made the payment and said it would record it as a charge in the third quarter. 

In other words, GM's headline number will probably be be dismal because of $1.475 billion in special items related to the recall mess. But as long-term investors, we'll look beyond those numbers to assess the condition of GM's overall business. 

Odds are, that will look pretty good.

Sales (of some key products) were very good during the quarter
GM's overall U.S. sales were up 5.6% during the third quarter. That's not bad, but it's not especially good. Still, some of GM's most profitable products did a lot better. In full-sized pickups -- among GM's most profitable products worldwide -- GM was able to take advantage of the momentum it built earlier in the year, when supplies of rival Ford's F-150 were tight.

Sales of the Chevrolet Silverado and GMC Sierra rose a combined 15.5% during the quarter. That alone would suggest a good result in North America -- but key SUV models also posted good gains. Sales of the big Chevy Traverse crossover SUV rose 14.7%, the midsize Chevy Equinox was up almost 7%, and the small (but quite profitable) Buick Encore saw a jump of almost 47%.

GM soundly beat Wall Street estimates last quarter in part because of very strong operating profit margins (10.2%) in North America thanks to its "mix" of sales. Trucks and SUVs are especially profitable products; GM seems poised to post a similarly strong margin this time around.

A mixed bag overseas
The ongoing slowdown in China is likely to hit GM's bottom line to some extent in the third quarter. Back in July, GM lowered its expectations for growth in China this year, and its overall sales were down 4.8% in August. GM was able to mitigate the effects of the slowing Chinese market last quarter thanks to timely cost cuts and better sales of high-margin products like premium SUVs. Those premium SUVs could help its margins again in the third quarter.

The all-new Buick Envision SUV has been a hot seller in China since its introduction early this year. GM has hinted that a U.S. version may be coming next year. Image source: General Motors.

GM's ongoing efforts to restructure its European operation are on track and gaining steam, but it's likely to be another few quarters before the unit shows a consistent profit. It lost just $45 million last quarter, but seasonal effects seem likely to widen the loss this time around. (Automakers traditionally spend more in the third quarter as they gear up to launch the next year's products.) 

Sharp recessions in key markets in South America have hurt results for most automakers. GM lost $144 million in the region last quarter. CFO Chuck Stevens said restructuring efforts would likely improve results in the second half of 2015; it's unclear how much impact they had in the third quarter.

The upshot: GM's outlook should be bright, but patience will be required
GM's stock has given investors a rocky ride this year. 

GM Chart

GM data by YCharts. Data through October 5.

The good news is that while some litigation is ongoing, it's likely most of the expenses of last year's recall mess are past. GM's business in North America is quite healthy, efforts overseas appear to be on track, and new models like the Chevy Malibu and Cruze sedans appear to be very competitive -- and GM says they're more profitable, too.

Unless GM surprises us, this quarter isn't likely to hurt the stock, but (again, absent a surprise) it isn't likely to boost share prices a whole lot, either. I continue to believe there's a very good investment story unfolding, here, but it may take a few years for the share price to show it.