General Motors Posts Strong Quarterly Performance, But Challenges Loom
Full-Year Profit Hits High End of Range, Upbeat Guidance Issued
General Motors (GM) has continued its impressive quarterly performance, with full-year profit reaching the high end of its projected range. The US automaker has also issued upbeat forward guidance, despite potential challenges from new White House regulations.
Revenue and Earnings Beat Expectations
In the fourth quarter, GM reported revenue of $47.70 billion, an 11% increase from the previous year. Adjusted earnings per share (EPS) came in at $1.92, surpassing expectations. Adjusted earnings before interest and taxes (EBIT) reached $2.50 billion, a 42.8% increase from the previous year.
Full-Year Performance and Guidance
For full-year 2024, GM earned $14.9 billion in adjusted EBIT. The company has boosted its guidance for the third time, forecasting 2024 adjusted profit of $14 billion to $15 billion. GM now sees 2025 profit coming in at a range of $13.7 billion to $15.7 billion, with a lower low bound but a higher upper bound than in 2024.
Challenges Ahead: Electric Vehicle Business and Manufacturing Footprint
Despite the strong performance, GM faces potential challenges from new White House regulations, which could impact its electric vehicle business and manufacturing footprint. The company has not modeled the effects of potential tariffs or loss of federal EV tax credits in its guidance, but has a “playbook” in place to prepare for various outcomes.
Electric Vehicle Business: Growth and Challenges
GM credits improvements in its EV business as a reason for its better results in the past quarter. The company has doubled its EV market share over the course of the year and has reported positive equity income in China. However, growth in the business hasn’t been as fast as projected, with GM falling short of its 200,000 EV sales target in 2024. The company forecasts 300,000 EV sales in 2025, which is expected to provide an earnings tailwind of $2 billion to $4 billion.
Share Buyback Plan and Dividend Increase
In June, GM issued a new share buyback plan to repurchase up to $6 billion of its outstanding common shares. The company has also increased its dividend by 33%, beginning last January. While GM did not confirm any new share buybacks or ASR programs, management and the board are exploring ways to expand those if possible.
Outlook for 2025
Despite the challenges ahead, GM remains optimistic about its prospects for 2025. The company is forecasting 2025 profit to come in at a range of $13.7 billion to $15.7 billion, with a lower low bound but a higher upper bound than in 2024. Diluted and adjusted EPS are seen at $11.00 to $12.00 for the year.
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