General Motors CEO Mary Barra, center, at the New York Stock Exchange, Nov. 17, 2022.
Source: NYSE
DETROIT — General Motors on Tuesday raised key guidance for 2023 after reporting first-quarter results that topped Wall Street’s top- and bottom-line forecasts. Here’s how GM did, compared with what Wall Street expected based on average estimates compiled by Refinitiv:
- Adjusted earnings per share: $2.21 vs. $1.73 expected
- Revenue: $39.99 billion vs. $38.96 billion expected
For the full year, GM is raising its adjusted earnings expectations to a range of between $11 billion and $13 billion, or $6.35 to $7.35 a share, up from a previous range of $10.5 billion to $12.5 billion, or between $6 and $7 a share. GM also raised expectations for adjusted automotive free cash flow to a range of $5.5 billion and $7.5 billion, up from an earlier forecast of $5 billion to $7 billion.
GM lowered its guidance, however, for net income attributable to stockholders due to $875 million in special charges related to a previously announced employee buyout program during the quarter. The new range is between $8.4 billion and $9.9 billion, down from $8.7 billion to $10.1 billion.
GM shares rose about 3% in premarket trading following the report.
CFO Paul Jacobson said the company felt confident in raising its adjusted earnings guidance after first-quarter results came in above the company’s internal expectations. Cost-cutting efforts such as the employee buyout program had an impact on results faster than expected, he said.
The employee buyouts were part of GM’s plan announced earlier this year to cut $2 billion in structural costs by the end of 2024.
“All-in-all we’re feeling confident about 2023,” Jacobson said during a call with reporters.
GM’s first-quarter results included adjusted earnings of $3.8 billion, down 6% from a year earlier. The company’s net income attributable to stockholders was down by 18.5% to about $2.4 billion from the first quarter of 2022. In addition to the employee buyout program, GM spent $99 million on buying out Buick dealers during the quarter.
GM said revenue during the first three months of this year was up 11.1% from roughly $36 billion a year earlier. Its net income during the first quarter was down by roughly 18% to $2.3 billion compared to a year earlier.
Wall Street analyst will be listening to the automaker’s earnings call Tuesday morning for any new information regarding the company’s electric vehicle production, which has been slow to ramp up, as well as any commentary about the current EV landscape following price cuts from industry leader Tesla.
Shares of GM have put up lackluster performance this year, up by about 2%. They closed Monday at $34.29 per share — off from a 52-week high of $43.63 per share.
Ahead of reporting its first-quarter results, GM said Tuesday it plans to invest more than $3 billion with South Korea-based Samsung SDI to build a new battery cell manufacturing plant in the United States that is targeted to begin operations in 2026. A location for the plant has not been decided
The plant, which is GM’s fourth announced battery facility for the U.S., is expected to produce “nickel-rich prismatic and cylindrical cells.” The batteries differ from the company’s current pouch cells in its newest U.S. EVs.
The announcement coincides with a visit to the United States by South Korean President Yoon Suk Yeol.
This story is developing. Please check back for updates.
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