World Stock Watch

General Motors Shifts into High Gear with Strong Q3 Earnings

In a welcome surprise for investors, General Motors (GM) has reported a significant boost in its third-quarter earnings, exceeding revenue and profit expectations. The automaker’s Q3 revenue reached $48.78 billion, a 10.5% increase from the same period last year, and adjusted EPS (earnings per share) of $2.96, surpassing estimates of $2.44.

Upward Revisions to Full-Year Guidance

GM’s strong performance has led to upward revisions in its full-year 2024 forecast, including:

• EBIT-adjusted: $14.0 billion to $15.0 billion (previously $13.0 billion – $15.0 billion)
• Automotive operating cash flow: $22.0 billion – $24.0 billion (previously $19.2 billion – $22.2 billion)
• Adjusted automotive free cash flow: $12.5 billion – $13.5 billion (previously $9.5 billion – $11.5 billion)
• EPS diluted-adjusted: $10.00 – $10.50 (previously $9.50 – $10.50)

CEO Mary Barra: “We’re Not Mistaking Progress for Winning”

Despite the positive results, GM CEO Mary Barra remains cautious, stating that the company is “not mistaking progress for winning.” She emphasized the need for continued focus on optimizing ICE margins and making EVs profitable on an EBIT basis as quickly as possible.

CFO Paul Jacobson: “Variable Profit is a Really Important Step”

GM CFO Paul Jacobson highlighted the importance of variable profit in achieving profitability. He explained that reaching an inflection point where scaling up sales starts to eat into high fixed costs is crucial for the company’s success.

EV Sales: A Highlight in Q3

GM’s EV sales were a bright spot in Q3, with total sales of 32,195 EVs, up 60% compared to the same period last year. The company is targeting EV profitability on a positive variable profit margin basis and expects to trim EV costs by $2 billion to $4 billion in 2025.

Looking Ahead

GM expects 2025 EBIT-adjusted to be at a similar range to full-year 2024 results. As the company continues to scale up its EV production, it anticipates significant improvements in EV EBIT in the coming years.