General Motors ( GM ) cheered investors on Tuesday morning after the automaker raised its guidance for the third time this year, handily beating third-quarter revenue and profit expectations.
For the quarter, GM posted revenue of $48.78 billion, easily topping the Bloomberg consensus estimate of $44.69 billion, and up from nearly $48 billion in the previous quarter. GM’s Q3 revenue was up 10.5% from last year.
The company booked adjusted EPS (earnings per share) of $2.96, beating expectations of $2.44. It posted EBIT-adjusted profit of $4.115 billion, up 15.5% from a year ago, and EBIT-adjusted margin rose to 8.4% from 8.1% year-on-year.
GM shares rose nearly 8% in early trading.
Based on the guidance, GM made the following upward revisions to its full-year 2024 forecast:
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Adjusted EBIT: $14.0 billion to $15.0 billion ($13.0 billion – $15.0 billion previously)
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Automotive operating cash flow: $22.0 billion – $24.0 billion ($19.2 billion – $22.2 billion previous)
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Adjusted automotive free cash flow: $12.5 billion – $13.5 billion ($9.5 billion – $11.5 billion previously)
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Diluted-adjusted EPS: $10.00 – $10.50 (Previously $9.50 – $10.50)
“I’m proud that GM continues to deliver our best vehicles with strong financial results. But I want to be clear that we’re not mistaking progress for success,” GM CEO Mary Barra wrote in a letter to shareholders. “Competition is fierce and the regulatory environment will continue to tighten. That’s why we are focused on improving our ICE margins and making our EVs profitable on an EBIT basis.”
GM CFO Paul Jacobson said in a media call with reporters that a 19% reduction in GM’s stock count provided a “tailwind” to the EPS beat, with the profit driven by the earnings power of the company’s core business.
In Q3, GM delivered 659,601 vehicles, down 2% from a year ago; However, retail sales increased by 3%. GM said it delivered more vehicles than any other automaker in the U.S. during the quarter.
Not surprisingly, sales of GM’s pickups and full-size SUVs led the way, but EV sales were also a highlight. Amid the sales slump for the Bolt EV, GM’s other EV models suffered a slowdown with sales totaling 32,195 EVs, up 60% from a year ago.
Jacobson said at GM’s investor day in October that the company is still targeting EV profitability. In terms of positive variable profit marginDespite reducing its EV production volume to 200,000 units per year from 200,000 to 250,000. The company expects to reduce EV costs by $2 billion to $4 billion by 2025.
In the media call, Jacobson explained why variable profitability is so important. “Variable profitability is a very important step on the journey to profitability. It means you’ve reached an inflection point,” he said, where increasing sales starts eating into higher fixed costs. “As we scale, our EBIT losses are starting to come down,” he added.
During its investor day, GM indicated that peak EV losses in 2024 would “help.” [in] We expect EV EBIT to improve significantly in the coming years.
Looking ahead, Barra said GM expects 2025 EBIT-adjusted full-year results to be in a similar range to 2024 results, as the company said during its investor day.
Press Subramanian is a Yahoo Finance reporter. You can follow him X And on Instagram.
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