GM (GM) kept the earnings momentum going with strong first quarter results on Tuesday, resulting in the automaker upping its full-year guidance. GM said it still sees “positive variable profit” in its EV business in the back half of 2024.
For the quarter, GM reported top-line revenue of $43.0 billion, compared with the $42.09 billion Bloomberg consensus expectation. That was a jump of 7% on the same period a year ago and matched the last quarter’s $43 billion in sales.
In terms of profit, GM posted adjusted earnings per share of $2.62, versus estimated EPS of $2.12, with adjusted EBIT (earnings before interest and taxes) of $3.9 billion. GM’s Q1 operating profit came in at $3.7 billion, topping estimates of $3.12 billion.
GM’s strong performance led the company to lift its 2024 guidance. The auto company now sees FY adjusted EBIT of $12.5 billion to $14.5 billion (vs. $12.0 billion to $14.0 billion prior), and adjusted EPS of $9.00 to $10.00 (vs. $8.50 to $9.50 prior).
GM also boosted its automotive operating cash flow ($18.3 billion to $21.3 billion) and adjusted automotive free cash flow ($8.5 billion to $10.5 billion).
As we continue to strengthen our ICE portfolio, scale EVs and reinvest in the business, we are very focused on capital efficiency, enhancing profitability and free cash flow, and we will continue to take steps to create shareholder value,” GM CEO Mary Barra said in a shareholder letter.
GM CFO Paul Jacobson said in a media call with reporters that boosting GM’s guidance following its “strong” first quarter was “the right thing to do.” Jacobson also added that GM’s customers have “been remarkably resilient in a period of higher interest rates.”
This may explain GM’s claim that it achieved a 15% compound annual growth rate in sales over the past 24 months, and why it expects to generate more than $30 billion in automotive adjusted free cash flow in the 2022-2024 period.
GM’s EV outlook and overall Q1 sales
GM reiterated that it sees “positive variable profit” in its EV business in the second half of 2024, tied to a projection of around 200,000 EVs sold through the end of the year. The company expects EBIT margin in the EV business to improve by 60 points from 2023 through 2024, and it sees “mid-single digit EBIT margin” by 2025, when the effect of clean energy tax credits are included.
GM had previously abandoned its goal of building 200,000 EVs through mid-2024. Jacobson said in the media call that GM will “pace ourselves with the customer” when it comes to EV sales.
Barra wrote in her letter that leveraging the strength of the traditional gas-powered business gave the company the ability to grow its EV business over time, while still “delivering strong margins and cash flows.”
As for deliveries in the quarter, GM reported Q1 sales in the US that topped estimates but were lower compared with a year ago thanks to lower fleet sales. GM delivered 594,233 vehicles, down 1.5% year-on-year, while retail sales were up 6%. GM said it delivered more vehicles than any other automaker in the US in Q1.
Digging deeper into EV sales, GM reported big gains with the Cadillac LYRIQ, Hummer EV, and the Silverado EV. The Silverado EV was only available to fleet customers, but will begin deliveries to retail customers in “the coming months,” the company said.
Chevrolet’s Blazer EV notched just 500 sales in the quarter, though it only resumed sales in March following a halt in sales due to a software issue. Looking ahead, the highly anticipated Equinox EV begins sales later in the second quarter, with prices starting at around $35,000.
Barra said GM is restarting operations at Cruise, its autonomous driving unit, in the Phoenix area, where cars are back on the road. Cruise shut down all operations last year following an accident with a pedestrian and other incidents involving its autonomous vehicles.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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