General Motors wows investors with quarterly revenue that's about $4 billion above consensus - MarketWatch


Category:  News & Politics

Via:  jbb  •  4 weeks ago  •  13 comments

By:   Ciara Linnane (MarketWatch)

General Motors wows investors with quarterly revenue that's about $4 billion above consensus - MarketWatch
Analysts were impressed with GM's profit margins amid the company's "massive EV transformation."

S E E D E D   C O N T E N T

Last Updated: Jan. 30, 2024 at 10:59 a.m. ET First Published: Jan. 30, 2024 at 6:45 a.m. ET By

Ciara Linnane

GM's stock soars 6% after blowout earnings, 'dramatic' guidance

General Motors will focus on expanding margins and pushing for profitability this year.

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Referenced Symbols

GM +7.84% SPX -0.13%

General Motors Co.'s stock jumped 6% Tuesday, after the auto giant blew past estimates for its fourth quarter, including revenue that was about $4 billion above consensus while offering upbeat guidance.

"Consensus is growing that the U.S. economy, the job market and auto sales will continue to be resilient, and at GM, we expect healthy industry sales of about 16 million units with the mix of EVs continuing to grow," Chief Executive Mary Barra wrote in a letter to shareholders.

The company GM, +7.81% posted net income of $2.102 billion, or $1.59 a share, for the quarter, up from $1.999 billion, or $1.39 a share, in the year-earlier period. Adjusted per-share earnings came to $1.24, ahead of the $1.16 FactSet consensus.

Revenue fell to $42.980 billion from $43.108 billion, but was also ahead of the $38.809 billion FactSet consensus.

Read now:Toyota, GM warn 61,000 car owners to stop driving until air bags can be replaced

Wedbush analyst Dan Ives said the numbers looked solid and provide crucial support that should restore confidence in the company, coming after several quarters of problems with EVs.

"With Barra & Co. in the midst of a massive EV transformation, this was a key quarter and outlook for the Street to gauge GM's resilience as it appears the profit margins and growth targets are still very much on track despite this murky backdrop," Ives wrote in a note to clients.

He reiterated his outperform rating on the stock, the equivalent of buy, and a $40 stock price target.

CFRA analyst Garrett Nelson urged caution, however, despite the earnings beat, guidance and a $10 billion share-buyback program.

"While the updated earnings guidance and its announcement to return capital to shareholders will certainly be received positively, we think caution is warranted given uncertainty regarding GM's longer-term plans related to EVs and the Cruise division plus its less competitive labor cost position," Nelson said.

In addition to its 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, said Barra.

California regulators revoked Cruise's license to operate in San Francisco after accusing the company of not being forthcoming enough about an Oct. 3 incident in which a Cruise driverless car hit a pedestrian who had already been struck by another car. After briefly stopping, the Cruise vehicle pulled to the side of the road, dragging the victim beneath it for about 20 feet—a detail not immediately relayed to authorities investigating the crash.

Cruise later suspended all operations of its driverless cars. Cruise co-founder and Chief Executive Kyle Vogt resigned in November. In December nine "key leaders" were dismissed as the company said it would lay off about 24% of its workforce.

"In our EV business, we expect our U.S. portfolio will become variable profit positive in the second half of the year based on our current expectations for EV demand and production growth, strong interest in our vehicles, lower commodity prices and other factors," Barra said.

While the pace of growth in EVs has slowed and created some uncertainty, many third-party forecasts are calling for U.S. EV deliveries to rise from about 7% of the industry in 2023 to at least 10% in 2024, which would imply another year of record sales, she added.

See now:GM dealers are pleading for more hybrid car models amid EV slowdown: report

The company is now expecting 2024 EPS of $8.50 to $9.50, while FactSet is expecting $7.75. It expects capex of $10.5 billion to $11.5 billion, including investments in its battery cell manufacturing joint ventures.

GM delivered "whopping" EPS guide, "in one of the more dramatic guides to start the year," Evercore ISI analysts said in their note Tuesday. "The ICE machine is up and working again."

GM stock has gained 5% in the last 12 months, while the S&P 500 SPX, -0.13% has gained 22.7%.

About the Author

Ciara Linnane

Ciara Linnane is MarketWatch's investing- and corporate-news editor. She is based in New York.


jrDiscussion - desc
Professor Principal
1  seeder  JBB    4 weeks ago

Full Disclosure...

I sold my GM today and am VERY VERY HAPPY!

Bought at $27 in Nov and I sold for $38 today...

GM is a very volatile stock, which is very handy.

If it goes below $30 again soon I am all in on it!

Professor Principal
2  seeder  JBB    4 weeks ago

GM has the legacy names, the infrastructure, the know how, the dealers, the parts and service departments in every corner of America and yet is still valued far far far less than Tesla? GMAB!

Freshman Expert
3  Outis    4 weeks ago

There's "news" every day about Barra screwing up.


Professor Principal
3.1  seeder  JBB  replied to  Outis @3    4 weeks ago

Is there? By whom? The electric naysayers? Compared to whom? GM is making money hand over fist and way undervalued based on book value and profits per share. They are also a prime takeover candidate because of this and the fact that, again, they have the plants and the distribution network and the parts and service departments everywhere to support them. GM is as American as Apple Pie...

Nothing is more American than a Chevrolet!

Freshman Expert
3.1.1  Outis  replied to  JBB @3.1    4 weeks ago

Umm..... Barra is female. And a CEO.

Must be terrible at the job.

Professor Principal
3.1.2  seeder  JBB  replied to  Outis @3.1.1    4 weeks ago

And, GM stock is way up again today...

Freshman Expert
3.1.3  Outis  replied to  JBB @3.1.2    4 weeks ago

Defies logic.

Professor Principal
3.1.4  seeder  JBB  replied to  Outis @3.1.3    4 weeks ago

No, it does not! Only if you know zip about stock valuations...

Greg Jones
Professor Guide
4  Greg Jones    4 weeks ago

"Nothing is more American than a Chevrolet!"

No better car than a made in America Toyota!

Bad news for EV's just keep piling up.......

Bad News For EVs Abounds Recently (yahoo.com)

The Big Year for EVs Gets Off to a Bumpy Start (msn.com)

The Major Problems Blocking America’s Electric Car Future - POLITICO

Professor Principal
4.1  seeder  JBB  replied to  Greg Jones @4    4 weeks ago

GM has a full line of gas and diesel products...

Toyota is going pretty much all hybrids today.

The new Camry will only be offered as Hybrid!

Greg Jones
Professor Guide
4.1.1  Greg Jones  replied to  JBB @4.1    4 weeks ago

That's a far cry from being fully EV by 2030. Maybe by 2130 perhaps.

Professor Principal
4.1.2  seeder  JBB  replied to  Greg Jones @4.1.1    4 weeks ago

As usual you are a century behind times.

It is 2023 not 1923, can't stop progress...

Not the the MAGAs are not still trying to!

Freshman Expert
4.2  Outis  replied to  Greg Jones @4    4 weeks ago

Polls and interviews of car-buyers are pretty constant: Americans want EVS... but those cars are just too expensive.

In my opinion, the manufacturers have shot themselves in the foot. They decided to sell ONLY upscale EVs. EXPENSIVE! So they're not selling many. Elsewhere in the world, there are EVs at just about every price point, and they're selling well.

VW is in deep trouble because its EV lineup can't even compete in price with other European manufacturers, much less the upcoming Chinese flood. When China sets its sights on the American market, either the US manufacturers are going to have to radically change their strategy... or beg the government to give them protection. 

Take a look at what the Chinese are selling in Europe, including under European brand names.


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