General Motors made headlines on Tuesday as they exceeded Wall Street’s expectations for the first quarter of 2024. Despite losses in other regions, the automaker managed to boost its forecast for the year due to the strong performance of its North American operations. This news was welcomed by investors, leading to a more than 4% increase in GM’s stock price.
During the first quarter, General Motors reported adjusted earnings of $2.62 per share, surpassing the expected $2.15. Additionally, the company’s revenue for the period amounted to $43.01 billion, exceeding the anticipated $41.92 billion. This marks a 7.6% increase in revenue compared to the previous year, showcasing GM’s growth and resilience in the market.
GM’s North American operations were highlighted as the driving force behind its first-quarter success. The division saw a significant increase in adjusted earnings by 7.4% from the previous year, totaling $3.84 billion. This growth was primarily fueled by robust truck sales, which helped offset losses in China and other international markets. The surge in retail sales and steady vehicle pricing further contributed to the division’s success.
Following its strong performance in the first quarter, General Motors raised its adjusted earnings and automotive free cash flow guidance for 2024. The company now expects adjusted earnings between $12.5 billion to $14.5 billion, or $9 to $10 per share. Similarly, the forecast for adjusted automotive free cash flow has been increased to a range of $8.5 billion to $10.5 billion. GM CEO Mary Barra emphasized the company’s commitment to capital efficiency, profitability, and shareholder value creation.
While GM’s North American operations have shown resilience, there are challenges on the horizon. Despite the strong performance, vehicle inventory levels in the U.S. have been rising, with the company ending the quarter with a 63 days’ supply of vehicles. This is above the automaker’s previous guidance of 50 to 60 days, indicating a potential oversupply in the market. However, GM CFO Paul Jacobson remains optimistic, stating that the company is well-positioned for the upcoming spring and summer selling season.
Looking ahead, General Motors is focused on ramping up production of its all-electric vehicles and strengthening its internal combustion engine portfolio. The company aims to produce between 200,000 and 300,000 EVs in 2024, signaling its commitment to sustainable and innovative technologies. Despite the challenges posed by increasing inventory levels, GM remains confident in its ability to navigate the ever-evolving automotive landscape.
General Motors’ performance in the first quarter of 2024 reflects a mix of successes and challenges. While the company has demonstrated resilience in its North American operations and exceeded market expectations, there are lingering concerns about rising inventory levels. By leveraging its strengths and addressing potential weaknesses, GM is poised to navigate the complexities of the industry and drive sustainable growth in the future.