General Motors Beats Earnings Expectations, Raises Guidance Targets
In a significant boost to its financial outlook, General Motors (GM) has exceeded Wall Street’s third-quarter earnings expectations, prompting the Detroit automaker to raise its key guidance targets for 2024. This marks the third time this year that GM has updated its guidance after beating top- and bottom-line expectations.
Strong Performance in North America
GM’s North American operations were a major contributor to its success, with adjusted earnings before interest and taxes of nearly $4 billion, up 12.9% from a year earlier. The results represented a 9.7% adjusted profit margin. In contrast, the company’s international markets experienced an 88.2% drop in adjusted earnings, while its financing arm reported a 7.3% decline.
Revenue and Net Income on the Rise
Revenue during the third quarter was up 10.5% from roughly $44 billion a year earlier, while net income rose slightly to $3 billion. GM’s average transaction price per vehicle remained over $49,000 from July through September, according to CFO Paul Jacobson.
Guidance Targets Raised
As a result of its strong performance, GM has raised its full-year adjusted earnings before interest and taxes guidance to between $14 billion and $15 billion, or $10 and $10.50 a share. The company has also increased its adjusted automotive free cash flow forecast to between $12.5 billion and $13.5 billion.
Investor Confidence Boosted
Shares of GM are up about 36% this year, boosted by billions of dollars in buybacks, which have led to a 19% year-over-year reduction in outstanding shares. The company’s investor day earlier this month indicated that its earnings strength is expected to continue into next year, with full 2025 guidance to be shared in January.
Key Issues Still to be Addressed
While GM’s quarterly report was largely positive, there are still several key issues that need to be addressed, including funding plans for its embattled Cruise autonomous vehicle unit, details on its China restructuring, and updates regarding its near-term electric vehicle sales and plans.
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