Normal Motors (GM) Q1 2023 outcomes
General Motors CEO Mary Barra, center, on the New York Stock Exchange, November 17, 2022.
Source: New York SE
DETROIT — General Motors on Tuesday raised key forecasts for 2023 after reporting first-quarter results that beat Wall Street’s top and bottom-line forecasts. Here’s how GM fared compared to what Wall Street was expecting based on average estimates compiled by Refinitiv:
- Adjusted earnings per share: $2.21 vs. $1.73 expected
- Revenue: $39.99 billion versus $38.96 billion expected
For the full year, GM is raising its adjusted earnings guidance to a range of $11 billion to $13 billion, or $6.35 billion to $7.35 per share, from a previous range of $10.5 billion to $12.5 billion or between $6 and $7 per share. GM also raised expectations for adjusted auto free cash flow to a range of $5.5 billion to $7.5 billion, up from a previous guidance of $5 billion to $7 billion.
However, GM lowered its guidance for net income attributable to shareholders due to an $875 million charge 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 after the report.
According to GM, revenue for the first three months of this year rose 11.1% from about $36 billion a year earlier. However, its first-quarter net income fell about 18% year over year to $2.3 billion.
CFO Paul Jacobson said the company is confident of raising its adjusted earnings guidance after first-quarter results beat the company’s internal expectations, including continued demand for high-end models. Cost-cutting efforts like the employee transfer program were also impacting results faster than expected, he said.
The employee buyouts were part of GM’s plan, announced earlier this year, to reduce structural costs by $2 billion by the end of 2024.
“All things considered, we’re confident about 2023,” Jacobson said during a call with reporters.
GM’s first-quarter results included adjusted income of $3.8 billion, down 6% year over year. The company’s net income attributable to shareholders, which excludes some dividend payments, fell 18.5% from the first quarter of 2022 to about $2.4 billion. In addition to the employee buyout program, GM spent $99 million buying out Buick dealerships during the quarter.
GM CEO Mary Barra also highlighted reversals in the company’s international operations in a letter to shareholders on Tuesday, with the exception of China, which has seen significant declines in recent years.
GM’s China equity income was $83 million in the first quarter, down 64.5% year-over-year. The automaker’s other international businesses grew profits 5.8% to $347 million. North America generated about $3.6 billion for the automaker at the start of the year, up 13.8% from the first quarter of 2022.
Wall Street analysts will listen to the automaker’s earnings conference call Tuesday morning for fresh information on the company’s electric vehicle production, which has been ramping up at a slow pace.
Jacobson told reporters that GM doesn’t think it can do with recent EV price cuts from automakers like Ford. B. must correspond or follow Tesla. He said officials “feel good about where our prices are right now.”
Separately, GM said Tuesday that 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, which is expected to start operating in 2026. A location for the plant is not yet known decided.
The plant, which is GM’s fourth announced battery plant for the US, is said to produce “prismatic and cylindrical cells with high nickel content.” The batteries differ from the pouch cells used in GM’s latest US electric vehicles.
The announcement coincides with a visit to the United States by South Korean President Yoon Suk Yeol.
This story evolves. Please check again for updates.