General Motors (GM) released its first-quarter financial results, surpassing Wall Street expectations and raising its annual forecast. The Michigan-based automaker reported a 24.4% increase in net income to $3 billion, driven by a 7.6% rise in revenue to $43 billion. Adjusted earnings per share of $2.62 outperformed the average Wall Street estimate of $2.15. Despite a challenging environment marked by higher interest rates, GM’s chief financial officer, Paul Jacobson, highlighted the resilience of consumers. The automaker raised its adjusted pretax profit projection to a range of $12.5 billion to $14.5 billion for the year, up from the previous estimate of $12 billion to $14 billion.
Chief Executive Mary Barra acknowledged two major challenges facing GM: addressing declining sales in China and salvaging its robotaxi unit, Cruise. While Cruise has resumed operations with human drivers in Phoenix, Arizona, it faces an uphill battle after losing $2.7 billion last year. GM’s financial results did not include a breakdown for its EV business, but Jacobson maintained the forecast for profitability by the second half of 2024. Barra noted improvements in profitability due to scale, material cost, and mix enhancements. The company’s joint venture with LG Energy Solution, Ultium Cells, is ramping up battery cell production in Ohio and Tennessee.
GM also completed the first tranche of a $10 billion stock buyback program in the first quarter, following a new labor agreement with the United Auto Workers union. The automaker’s strong performance in the gas-engine vehicle segment is expected to provide a cushion for investors as it continues to invest heavily in electric vehicle development. The market for battery-powered vehicles remains uncertain following Tesla’s layoffs and price cuts, with the EV leader expected to report its first revenue drop and lowest gross margin in nearly four years when it releases its quarterly earnings on Tuesday.
