General Motors (GM) gave investors a boost early Tuesday after easily beating expectations for third-quarter sales and profits and raising its earnings estimates for the third time this year. Gave.
For the quarter, GM reported revenue of $48.78 billion, easily beating the Bloomberg consensus estimate of $44.69 billion and up from about $48 billion in the previous quarter. GM’s third-quarter sales also increased 10.5% year-over-year.
The company reported adjusted earnings of $2.96 per share, well above expectations of $2.44. The company reported EBIT-adjusted profit of $4.115 billion, an increase of 15.5% year over year, and EBIT-adjusted profit margin of 8.4%, up from 8.1% year-over-year.
GM stock rose nearly 8% in early trading.
From a guidance perspective, GM has revised its full-year 2024 forecast upward as follows:
Adjusted EBIT (earnings before interest and taxes): $14 billion to $15 billion (previously $13 billion to $15 billion)
Automotive operating cash flow: $22 billion to $24 billion (previously $19.2 billion to $22.2 billion)
Adjusted auto free cash flow: $12.5 billion to $13.5 billion (previously $9.5 billion to $11.5 billion)
Adjusted diluted EPS: $10 to $10.50 (was $9.50 to $10.50)
“We are proud that GM is delivering the best cars ever with strong financial results,” GM CEO Mary Barra said in a letter to shareholders. I want to make it clear that I am not mistaking this for a victory.” “Competition is fierce and the regulatory environment will continue to get tougher, so we are focused on optimizing our ICE (internal combustion engine vehicle) margins and bringing our EVs to profitability on an EBIT basis as quickly as possible. .”
GM Chief Financial Officer Paul Jacobson said in a press conference that the 19% reduction in GM shares through share buybacks was a “tailwind” for EPS growth, but the company’s profit growth was The company added that this was due to the profitability of its core businesses.
Jacobson told Yahoo Finance that the company will remain active in share buybacks in 2025.
In the third quarter, GM delivered 659,601 vehicles, down 2% year over year. However, retail sales increased by 3%. GM said it delivered more vehicles in the quarter than any other automaker in the United States.
Unsurprisingly, sales of GM’s pickups and full-size SUVs led the way, but sales of electric vehicles were also a highlight. While sales of the Bolt EV declined, GM’s other EV models recovered, with a total of 32,195 EVs sold, an increase of 60% from the previous year.
Unsold 2024 electric Lyriq utility vehicles line up outside a Cadillac dealership in Lone Tree, Colorado, on Sunday, June 2, 2024. (AP Photo/David Zarubowski) (ASSOCIATED PRESS)
At GM’s investor briefing in early October, Jacobson said that despite revising its EV production forecast to 200,000 units, the lower limit of 200,000 units, the company is still operating on a variable profit margin basis. The company stated that it is targeting positive EV profitability. Up to 250,000 units. The company expects to reduce EV costs by $2 billion to $4 billion in 2025.
story continues
In a media call, Jacobson elaborated on why variable returns are so important. “Variable margins are a very important step on the road to profitability. It means you have reached an inflection point where sales growth starts to eat into high fixed costs,” he said. “As you scale up, your EBIT losses start to decline,” he added.
GM said at its investor day that a peak in EV losses in 2024 “will help in the coming years as EV EBIT is expected to improve significantly.”
Looking ahead, Barra said GM expects adjusted EBIT in 2025 to be in the same range as full-year 2024 results, as stated in an investor presentation.
StockStory aims to help individual investors beat the market.
Pras Subramanian is a reporter for Yahoo Finance. you can follow him × And also on Instagram.
Click here for the latest earnings report and analysis, earnings whispers and expectations, and company earnings news.
Read the latest financial and business news from Yahoo Finance
