DETROIT — GM It easily beat Wall Street's third-quarter earnings expectations, leading the Detroit automaker to raise key 2024 guidance targets.
Here's how the company performed in the third quarter, compared to average estimates compiled by LSEG:
Earnings per share: $2.96 adjusted vs. $2.43 expected Revenue: $48.76 billion vs. $44.59 billion expected
This is the third time this year that General Motors has updated its guidance after it exceeded Wall Street expectations, led by the automaker's operations in North America.
GM now expects full-year adjusted earnings before interest and taxes to be between $14 billion and $15 billion, or $10 to $10.50 per share, up from $13 billion to $15 billion, or $9.50 to $10.50. It also raised its revised auto free cash flow forecast to between $12.5 billion and $13.5 billion, up from $9.5 billion and $11.5 billion.
The automaker reduced its net income attributable to common shareholders, which excludes some dividends, to between $10.4 billion and $11.1 billion, or $9.14 and $9.63 per share. This compares to its previous guidance of $10 billion to $11.4 billion, or $8.93 and $9.93.
GM Chief Financial Officer Paul Jacobson warned that profits will be lower during the fourth quarter, citing the timing of truck production, seasonality, lower wholesale volumes and vehicle mix, including the sale of more electric vehicles.
GM shares rose nearly 2% during premarket trading on Tuesday.
The automaker has topped Wall Street's earnings-per-share estimates for nine straight quarters and revenue for eight straight quarters.
Contributing to GM's third-quarter results were continued strong pricing, offsetting losses in China and higher year-over-year costs of $200 million in labor and $700 million in warranty costs.
The average transaction price per vehicle, which Wall Street monitors for signs of weakness, remained more than $49,000 from July through September, Jacobson said.
“The consumer has held up well for us,” he said during a news conference. “Nothing we've seen has changed from where we've been over the last few quarters.”
GM, Ford and Stellantis shares in 2024.
GM said revenue during the third quarter rose 10.5% from about $44 billion a year earlier. Its net income during the quarter rose slightly to $3 billion.
Jacobson noted that some of the company's outperformance in the third quarter was fueled by the automaker pulling some truck production from the fourth quarter, which represented a $400 million increase in adjusted earnings.
The company's North American operations account for a disproportionate amount of its profits. These included adjusted earnings before interest and taxes of nearly $4 billion, an increase of 12.9% from the previous year. The results represent an adjusted profit margin of 9.7%.
The North American results compare to a $137 million loss in China, where GM is trying to restructure its operations, and an 88.2% decline in adjusted profits in its other international markets compared with the previous year, to $42 million.
General Motors' financing arm reported a 7.3% decline in adjusted earnings to $687 million during the third quarter. The automaker's autonomous cruise vehicle unit lost nearly $1.3 billion through September, including a loss of $383 million during the third quarter.
The quarterly report comes just two weeks after GM's investor day in which the company indicated its earnings strength is expected to continue next year. GM expects to share its full 2025 guidance in January.
Topics of interest to investors that were not covered earlier this month include GM's financing plans for its embattled autonomous Cruise vehicle unit, details about China's restructuring and any updates on near-term electric vehicle sales and plans.
“We think we can turn the situation around,” Jacobson told CNBC's Phil LeBeau on Tuesday regarding China. He said the automaker has several meetings scheduled with its Chinese partners on restructuring, including cost cuts.
GM shares were up about 36% this year as of Monday's close at $48.93. The stock was boosted by multibillion-dollar buybacks by GM, resulting in a 19% year-over-year decline in shares outstanding.
This is developing news. Please check back for additional updates.
