General Motors Q1 Earnings Surprise: North America Growth, Rising Profit Margin And Annual Guidance Boost

General Motors Company (NYSE: GM) reported a fiscal first-quarter 2024 sales growth of 7.6% year-on-year to $43.01 billion, beating the analyst consensus estimate of $41.88 billion.

Adjusted EPS of $2.62 beat the consensus estimate of $2.14. The stock price climbed after the results.

GM's market share reached 8.1% for the quarter, compared to 8.7% a year ago. In the U.S., the share changed to 15.4%, down from 16.4%. Its share in China reached 7.9%, down from 9.1% a year earlier.

GM's North American operations, backed by truck sales, mainly contributed to its first-quarter beat and guidance raise, CNBC cites the automaker. 

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

Adjusted EBIT for the quarter improved by 1.8% to $3.87 billion, with an adjusted EBIT margin of 9.0%, down by 50 bps. Net income margin was 6.9% versus 6.0% a year ago.

GM CFO Paul Jacobson said automaker's vehicle prices were flat to slightly lower due to vehicle mix during the quarter. He said the company still plans to produce 200,000 – 300,000 EVs in 2024.

The company held $25.5 billion in cash and equivalents as of March 31, 2024. The adjusted automotive free cash flow was $1.09 billion.

FY24 Guidance: General Motors projects adjusted EPS of $9.00 – $10.00 (prior $8.50 – $9.50) versus consensus of $9.08. 

The company projects adjusted automotive free cash flow of $8.5 billion—$10.5 billion (prior $8.0 billion—$10.0 billion) and reiterated capital spending of $10.5 billion—$11.5 billion.

In the company conference call, General Motors CFO said the company expects to return to profit in China in the second quarter.

General Motors stock gained over 26% in the last 12 months. Investors can gain exposure to the stock via First Trust Nasdaq Transportation ETF FTXR and Invesco S&P 500 Pure Value ETF RPV.

Price Action: GM shares are trading higher by 5.05% at $45.39 in premarket at the last check Tuesday.

Photo: Brandon Woyshnis/Shutterstock.com