General Motors Continues To Defy Expectations Thanks To Pickups And U.S. Demand

On Tuesday, General Motors GM easily surpassed Wall Street’s third-quarter expectations, raising its key guidance target for the full year fueled by the strength of its North America operations.

Third Quarter Highlights

For the quarter ended on September 30th, General Motors reported revenue went up about 10.5% YoY to $48.76 billion, smashing LSEG’s consensus estimate of $44.59 billion. During the third quarter, GM reported 1.5 million total global sales thanks to strong pickup demand in the U.S. Net income also rose, although sluightly, to $3 billion.

Adjusted earnings per share jumped 30% YoY as they amounted to $2.96, topping LSEG’s consensus estimate of $2.43 per share as strong pricing managed to offsetting offset in China, along with YoY cost increases of $200 million in labor and $700 million in warranty costs.

For the third time this year, GM lifted its 2024 guidance.

GM guided for full-year adjusted EBIT between $14 billion and $15 billion, or $10 and $10.50 a share, lifting its prior outlook that ranged from $13 billion and $15 billion, or $9.50 and $10.50. GM also lifted its adjusted automotive free cash flow whose outlook range was previously before $9.5 billion and $11.5 billion, as it now guided for a range between $12.5 billion and $13.5 billion.

GM also narrowed the net income attributable to common stockholders to a range between $10.4 billion and $11.1 billion, or $9.14 and $9.63 per share. 

Due to the timing of truck production, seasonality, lower wholesale volumes and vehicle mix, CFO Paul Jacobson warned fourth quarter earnings will be lower.

The third quarter report comes after GM’s recent investor day when the automaker stated its expectation of earnings strength continuing into next year. But, GM still needs to turnaround its losses in China and find its way in the EV world. 

EV News

GM delivered 32,195 EVs during the reported quarter, its new quarterly record as deliveries surged 60% YoY and 46% from the previous, third, quarter. Its Detroit peer, Ford Motor F reported its  EV sales jumped 12.2% YoY to 23,509 vehicles, with sales growth slowing down significantly. With its EV pace, GM managed to take a lead over Ford on the EV front, while both still trail the EV king, Tesla Inc TSLA. While Ford turned to hybrids, GM focused on expanding its EV lineup. Tesla will be revealing its quarterly results on Wednesday. However, Tesla already revealed its global Q3 deliveries increased 6% YoY. Besides hitting its third best quarterly deliveries figure, Tesla also restored its EV sales growth for the first time this year. Tesla kicked off October with quite a bang including its robotaxi reveal so its third quarter results are highly anticipated.

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