General Motors shares jumped 6% on Tuesday, after the auto giant beat previous estimates for the fourth quarter, including revenue that was about $4 billion higher than expected while providing upbeat guidance.
“Consensus is growing that the U.S. economy, labor market, and auto sales will remain resilient, and at GM, we expect healthy industry sales of approximately 16 million units as the electric vehicle mix continues to grow,” CEO Mary Barra wrote. In a message to shareholders.
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The company generated net income of $2.102 billion, or $1.59 per share, during the quarter, up from $1.999 billion, or $1.39 per share, in the same period last year. Adjusted earnings per share came to $1.24, ahead of the FactSet consensus of $1.16.
Revenue fell to $42.980 billion from $43.108 billion, but was also ahead of the FactSet consensus of $38.809 billion.
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Wedbush analyst Dan Ives said the numbers look strong and provide critical support that should restore confidence in the company, after several quarters of problems with electric vehicles.
“With Barra & Co. in the midst of a massive electric vehicle transformation, this was a key quarter and outlook for the Street to gauge GM's resilience as profit margins and growth targets appear to remain on track despite this uncertain backdrop.” Ive written in a note to clients.
He reiterated his outperform rating on the stock, which equates to buy, and a $40 stock price target.
However, CFRA analyst Garrett Nelson urged caution, despite higher earnings, guidance and a $10 billion stock buyback program.
“While its updated earnings guidance and announcement of returning capital to shareholders will certainly be received favorably, we believe caution is warranted given the uncertainty regarding GM's long-term plans related to electric vehicles and the cruise division as well as its lower labor cost position.” competitive,” Nelson said.
In addition to internal combustion engine models, such as the 2024 Chevrolet Traverse and 2025 Chevrolet Equinox, the company aims to grow its electric vehicle business. The company also plans to relaunch its self-driving cruise business, Barra said.
California regulators revoked Cruise's license to operate in San Francisco after accusing the company of not responding adequately to an Oct. 3 incident in which a driverless Cruise car struck a pedestrian who had already been hit by another car. After stopping briefly, Cruz's vehicle stopped on the side of the road, pulling the victim under it for approximately 20 feet, details that were not immediately conveyed to authorities investigating the crash.
Cruise later halted all operations of its self-driving cars. Cruise co-founder and CEO Kyle Vogt resigned in November. In December, nine “key leaders” were fired after the company said it would lay off about 24% of its workforce.
“In our EV business, we expect our U.S. portfolio to become variable earnings positive in the second half of the year based on our current outlook for EV demand and production growth, strong interest in our vehicles, lower commodity prices and other factors.” He said.
While the pace of EV growth has slowed and created some uncertainty, many third-party forecasts call for US EV deliveries to rise from about 7% of the industry in 2023 to at least 10% in 2024, meaning Implying another year of industry. It added record sales.
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The company now expects 2024 EPS to be between $8.50 and $9.50, while FactSet expects $7.75. It expects capital expenditures to be between $10.5 billion and $11.5 billion, including investments in its joint ventures to manufacture battery cells.
GM delivered “huge evidence” of earnings per share, “in one of the most dramatic pieces of evidence to start the year,” Evercore ISI analysts said in their note Tuesday. “The ICE machine is working again.”
GM stock is up 5% in the past 12 months, while the S&P 500 SPX,
By 22.7%.
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Claudia Assis in San Francisco contributed.
