GM’s Upbeat Q4 Earnings Beat Expectations, Points to Strong EV Growth in 2024

Detroit, Michigan – General Motors (GM) reported strong fourth-quarter earnings and provided a positive outlook for 2024 profits on Tuesday. The automaker’s financial update was well-received by investors, with GM’s stock surging over 7% in premarket trading.

In the fourth quarter, GM surpassed revenue expectations, reporting $42.98 billion compared to the estimated $39.53 billion. Although this figure was slightly lower than the $43.1 billion reported in the same quarter of the previous year, it still marked a beat in revenues. GM also exceeded earnings estimates, with an adjusted earnings per share of $1.24 compared to the estimated $1.16.

For the full year, GM achieved adjusted earnings before interest and taxes (EBIT) of $12.4 billion, meeting its reinstated outlook from November 2023. This solid performance prompted the company to maintain a similar forecast for adjusted EBIT of $12 billion to $14 billion in 2024. GM also expects adjusted earnings per share for the year to range between $8.50 and $9.50.

GM’s upbeat earnings report comes as the company navigates challenges from the UAW strike and adjusts its electric vehicle (EV) rollout strategy. The company acknowledged that the EV rollout had introduced some uncertainty but expressed confidence in the growth of the EV market. GM CEO Mary Barra emphasized that the company expects a healthy industry demand of about 16 million units, with the EV segment continuing to expand.

While GM experienced delays in its EV growth in 2023, it anticipates becoming “variable profit positive in the second half of the year” based on current expectations for EV demand and production growth. The company set a goal to achieve low-to-single-digit profitability in its EV division by 2025.

Despite the challenges posed by the UAW strike, GM’s sales in the fourth quarter remained resilient. The company had prepared for the strike by building up sufficient inventory and reported a 0.3% increase in Q4 US sales compared to the same period the previous year, selling approximately 625,176 vehicles. Overall, GM achieved a 14.1% increase in sales for the year, with a total of 2.6 million vehicles sold in 2023.

GM expects the US auto industry to rebound in 2024, forecasting total sales of 16 million vehicles. This projection represents a significant improvement from the pandemic-low sales of 13.4 million in 2022. However, GM projects a tough first quarter in China and faces challenges related to its Cruise AV business unit, which has come under investigation by regulatory bodies following an accident involving one of its autonomous vehicles.

In conclusion, GM’s strong financial performance in the fourth quarter reflects its ability to overcome challenges and leverage opportunities. The company’s focus on EV growth and its successful 2023 sales demonstrate its commitment to sustainable momentum and shareholder value creation. As GM continues to navigate the evolving automotive landscape, investors and industry stakeholders will closely monitor its progress in achieving its future goals.