Despite a slight decline in US vehicle sales, General Motors (GM) reported a significant increase in first-quarter net income, rising over 25% year-over-year. This impressive performance was primarily driven by strong deliveries of pickup trucks and other higher-profit vehicles. The automaker highlighted that its strong sales momentum is not experiencing the same price erosion witnessed by other companies in the industry.
GM’s solid first-quarter performance exceeded analyst expectations, with revenue increasing 7.6% to over $43 billion. Excluding one-time items, the company earned $2.62 per share, easily beating estimates of $2.13 per share. Analysts attributed this strong performance to GM’s focus on profitability and expense management.
The company’s success was reflected in its improved average sales price per vehicle, which remained stable at just under $50,000. This price stability, coupled with robust pickup sales, contributed to GM’s overall profitability. Additionally, retail sales of electric vehicles (EVs) rose during the quarter, and GM remains on track to achieve a mid single-digit profit margin on EVs next year.
CEO Mary Barra expressed optimism about GM’s future, noting the positive sales momentum for vehicles like the Cadillac LYRIQ, an electric SUV. She also emphasized the company’s commitment to China, despite challenges over the past several years. GM’s strong performance was somewhat tempered by losses in its international operations, including a $106 million loss in China, and the ongoing challenges faced by its Cruise autonomous vehicle unit, which lost $519 million pretax during the quarter.
Despite these setbacks, GM raised its full-year net income guidance slightly, reflecting confidence in its ability to maintain profitability throughout the year. The company’s commitment to innovation, particularly in the EV market, positions it well for long-term growth. As GM continues to execute its strategy, it is expected to remain a strong player in the automotive industry.
