General Motors raises 2024 guidance after big first-quarter earnings beat

DETROIT — General Motors on Tuesday raised its 2024 guidance after beating Wall Street’s top- and bottom-line expectations for the first quarter.

GM now expects adjusted earnings of $12.5 billion to $14.5 billion, or $9 to $10 a share, up from a previous range of $12 billion to $14 billion, or $8.50 and $9.50 a share; and net income attributable to stockholders of between $10.1 billion and $11.5 billion, or $8.94 and $9.94 per share, up from $9.8 billion to $11.2 billion.

The Detroit automaker also raised expectations for adjusted automotive free cash flow to a range of $8.5 billion to $10.5 billion, up from an earlier forecast of $8 billion to $10 billion.

GM shares jumped more than 4% immediately following the report.

Here’s how the company performed in the first quarter, compared with average estimates compiled by LSEG:

• Earnings per share: $2.62 adjusted vs. $2.15 expected
• Revenue: $43.01 billion vs. $41.92 billion expected

GM said revenue during the first three months of this year was up 7.6% from roughly $40 billion a year earlier. Its net income during the first quarter was up about 26% to $2.95 billion.

The automaker’s net income attributable to stockholders, which excludes some dividend payouts, was up 24.4% to $2.98 billion, or $2.56 per share, from the first quarter of 2023 when the company reported net income attributable to stockholders of about $2.4 billion, or $1.69 per share. 

The automaker’s adjusted earnings before interest and taxes were $3.87 billion, or $2.62 per share, during the first quarter. 

GM’s North American operations, driven by truck sales, were largely responsible for the company’s first-quarter beat and guidance raise, the automaker said.  

The division increased adjusted earnings during the quarter to $3.84 billion, up 7.4% from a year earlier, and helped to offset losses of $106 million in China and $10 million in other international markets during the first three months of the year.

Steady vehicle pricing and increased retail sales in North America also helped GM achieve a 10.6% adjusted profit margin in the region for the period – above its previously announced 8% to 10% range for the year.

GM’s financing arm reported adjusted earnings of $737 million during the first quarter, down 4.4% from a year earlier.

GM CFO Paul Jacobson said prices for the automaker’s vehicles were roughly flat to slightly down during the quarter, but not down as much as the 2% to 2.5% decline the company anticipated for the year.

“We do still have that embedded assumption of pricing down about 2% to 2.5% but haven’t seen it yet,” Jacobson told reporters during a briefing.

He also noted the company’s loss in China was “slightly better” than the company had previously forecast.

GM specifically noted that sales of its highly profitable pickups remain strong, while production of its all-electric vehicles continues to ramp up following bottlenecks in production, particularly with battery modules.

“As we continue to strengthen our [internal combustion engine] portfolio, scale EVs and reinvest in the business, we are very focused on capital efficiency, enhancing profitability and free cash flow, and we will continue to take steps to create shareholder value,” GM CEO Mary Barra said in a letter to shareholders.

Jacobson said the company still plans to produce between 200,000 and 3000,000 EVs during 2024.

While North America continues to be strong for the automaker, vehicle inventory levels in the U.S. are rising. The company ended the first quarter with a 63 days’ supply of vehicles – above the automaker’s previous guidance of 50 days to 60 days.

Jacobson said the company is watching those levels but is not too concerned about the number of vehicles ahead of a spring and summer selling season that includes some factory shutdowns for retooling.

“We actually feel pretty good about where we are,” he said. “It’s something that obviously we’re watching. But right now, no signs of any softness that we can see.”

This is developing news. Please check back for additional updates.