General Motors leapt Tuesday after providing a bullish outlook and a less harsh-than-expected Q4 report. Shares of the automaker surged to a buy zone.
General Motors reported a 41.5% decline in adjusted earnings to $1.24 per share, the company's first earnings drop in five quarters. Revenue ticked down a fraction to $42.98 billion to mark its first sales decrease in seven quarters. Results were hindered by several factors, most notably unsold electric vehicles, as well as the 40-day strike that curtailed various company operations.
FactSet analysts expected a 45% decline to $1.16 per share adjusted on about a 10% revenue decline to $38.8 billion.
During 2023, General Motors delivered 2.6 million vehicles in the U.S., up 14% year-over-year. The company touted a 16.2% total market share in the U.S. in 2023. Meanwhile, the company and its joint ventures delivered 2.1 million cars to China last year.
GM took a $1.6 billion charge, the impact of unsold EVs. The company also reported an $800 million charge during the quarter tied to the recall of Chevy Bolt batteries.
In a letter to shareholders, CEO Mary Barra said she expects the U.S. electric vehicle portfolio to turn profitable in the second half of the year, based on demand and production growth projections. GM cited third-party forecasts that see U.S. EV deliveries to rise at least 10% in 2024, compared to 7% growth last year, "which would mean another year record of EV sales," Barra wrote.
Barra said on the earnings call Tuesday that it's "true the pace of EV growth has slowed which has created some uncertainty." She added that while GM is optimistic about the EV business the company will watch demand conditions and be ready to build more internal combustion engine vehicles and "fewer EVs. "
Full-year earnings rose 1.2% to $7.68 per share on 9.6% revenue growth to $171.84 billion. Wall Street expected 2023 earnings of $7.58 per share on $166.92 billion in sales.
For 2024, General Motors expects adjusted earnings between $8.50 and $9.50 per share on adjusted earnings before interest and taxes (EBIT) between $12 billion to $14 billion. FactSet predicts full-year adjusted earnings of $7.75 per share on $169.93 billion in sales.
General Motors Stock
General Motors bolted 7.8% Tuesday.
The stock is rebounding from its 10-week line after eight weeks of tight trade. Some investors might plot the pattern as a handle in a bottoming cup base. In either case, the move put GM in a buy zone Tuesday.
Shares surged 6.2% in 2024.
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