A new GMC truck is displayed on the sales lot at Hanlees Hilltop GMC on July 02, 2024 in Richmond, California.
Justin Sullivan | Getty Images
DETROIT – General Motors easily beat Wall Street’s third-quarter earnings expectations, helping the Detroit automaker raise its main guidance target for 2024.
Here is the performance of the company in the third quarter, compared to the average estimate compiled by LSEG:
- Earnings per share: $2.96 adjusted vs $2.43 expected
- result: $48.76 billion vs $44.59 billion expected
It marks the third time this year that GM has updated its guidance after beating Wall Street’s top and bottom expectations, led by its North American operations.
GM now expects full-year adjusted earnings before interest and taxes to be between $14 billion and $15 billion, or $10 and $10.50 per share, up from between $13 billion and $15 billion, or $9.50 and $10 ,50. It also raised its adjusted automotive free cash flow forecast to between $12.5 billion and $13.5 billion, from $9.5 billion and $11.5 billion.
The automaker trimmed net income attributable to common shareholders, which excludes some dividend payments, to between $10.4 billion and $11.1 billion, or $9.14 and $9.63 per share. That compares with previous guidance of $10 billion to $11.4 billion, or $8.93 and $9.93.
GM’s third-quarter results were helped by strong pricing, offsetting losses in China and year-over-year cost increases of $200 million in labor and $700 million in warranty costs.
GM CFO Paul Jacobson said the company’s average transaction price per vehicle, which Wall Street has been monitoring for signs of weakening, remained over $49,000 from July to September.
“Consumers have been very good to us,” he said during a media briefing. “Nothing we see has changed from where we’ve been the last few quarters.”
Shares of GM, Ford and Stellantis in 2024.
GM said revenue during the third quarter rose 10.5% from about $44 billion a year earlier. Net income during the quarter rose slightly to $3 billion.
Jacobson noted some of the company’s third-quarter outperformance was helped by automakers pulling back truck production from the fourth quarter, which showed a $400 million increase in adjusted earnings.
The company’s North American operations show a disproportionate amount of revenue. They included adjusted earnings before interest and taxes of nearly $4 billion, up 12.9% from the previous year. The results showed an adjusted profit margin of 9.7%.
North American results compared to a loss of $ 137 million in China, where GM is trying to restructure operations, and an 88.2% drop in adjusted earnings in other international markets compared to the previous year of $ 42 million.
GM’s financing arm reported a 7.3% decline in adjusted earnings to $687 million during the third quarter.
The quarterly report comes just two weeks after GM’s investor day where the company indicated earnings strength will continue into next year. GM expects to share its full 2025 guidance in January.
Topics of interest to investors that were not addressed earlier this month include GM’s financing plans for its Cruise autonomous vehicle unit, details on China’s restructuring and updates on near-term electric vehicle sales and plans.
GM shares are up about 36% this year as of Monday’s close of $48.93. The stock has been raised by billions of dollars in buybacks by GM, which has led to a 19% year-over-year red in outstanding shares.
This expands the news. Please check back for additional updates.