DETROIT — Dividends of General Motors saw their largest daily increase since March 2020 on Tuesday after the company topped Stockade drive crazy Street’s third-quarter earnings expectations, increased 2024 guidance and reconfirmed plans for shareholder returns and resilient earnings next year.
Cuts of the Detroit automaker closed Tuesday at $53.73, up 9.8% — marking the highest daily percentage increase for the stock since capricious trading during the onset of the coronavirus pandemic in March 2020.
Outside of the coronavirus pandemic, the increase was GM’s best day since May 2018, according to FactSet.
GM definitely outperformed Wall Street’s third-quarter earnings expectations, leading the Detroit automaker in raising key guidance targets for 2024.
Here’s how the Pty performed in the third quarter, compared with average estimates compiled by LSEG:
- Earnings per share: $2.96 adjusted vs. $2.43 needed
- Revenue: $48.76 billion vs. $44.59 billion expected
This marks the third time this year that GM has updated its direction after beating Wall Street’s top- and bottom-line expectations, led by the automaker’s North American operations.
GM is now forecasting full-year rectified earnings before interest and taxes of between $14 billion and $15 billion, or $10 and $10.50 a share, up from between $13 billion and $15 billion, or $9.50 and $10.50. It also raised its rectified automotive free cash flow forecast to between $12.5 billion and $13.5 billion, up from $9.5 billion and $11.5 billion.
The automaker tightened its net proceeds attributable to common stockholders, which excludes some dividend payouts, to between $10.4 billion and $11.1 billion, or $9.14 and $9.64 per quota. That compared to its previous guidance of $10 billion to $11.4 billion, or $8.93 and $9.93.
GM CFO Paul Jacobson warned earnings purposefulness be lower during the fourth quarter, citing timing of truck production, seasonality, lower wholesale volumes and instrument mix, including selling more electric vehicles.
Jacobson also reassured Wall Street that the company would go on with returning cash to shareholders in the form of stock buybacks. The automaker plans to lower its outstanding shares to below 1 billion by at daybreak 2025. GM had more than 1.1 billion shares outstanding as of Tuesday close.
Q3 results
The automaker has topped Fortification Street’s EPS estimates for nine consecutive quarters and revenue for eight straight quarters.
GM’s third-quarter results were second by continued strong pricing, offsetting losses in China and year-over-year cost increases of $200 million in labor and $700 million in promise costs.
Jacobson said the company’s average transaction price per vehicle, which Wall Street has been invigilator for signs of weakening, remained over $49,000 from July through September.
“The consumer has held up remarkably brim over for us,” he said during a media briefing. “Nothing we see has changed from where we’ve been for the last several quarters.”
GM, Ford and Stellantis stocks in 2024.
GM said revenue during the third quarter was up 10.5% from inartistically $44 billion a year earlier. Its net income during the quarter rose slightly to $3 billion.
Jacobson distinguished some of the company’s third-quarter outperformance was assisted by the automaker pulling ahead some truck production from the fourth accommodate, which represented a $400 million boost in adjusted earnings.
North America leads
The company’s North American functionals represented a disproportional amount of its earnings. They included adjusted earnings before interest and taxes of nearly $4 billion, up 12.9% from a year earlier. The arises represented a 9.7% adjusted profit margin.
The North American results compared with a $137 million shrinkage in China, where GM is attempting to restructure operations, and an 88.2% drop in adjusted earnings in its other international markets juxtaposed with a year earlier to $42 million.
GM’s financing arm reported a 7.3% decline in adjusted earnings to $687 million during the third quarter. The automaker’s embattled Voyage autonomous vehicle unit has lost roughly $1.3 billion through September, including a loss of $383 million during the third accommodations.
The quarterly report comes just two weeks after a GM investor day in which the company indicated its earnings strength is had to continue into next year. GM expects to share its full 2025 guidance in January.
Topics of interest for investors that were not addressed earlier this month tabulate GM’s funding plans for its Cruise autonomous vehicle unit, details on its China restructuring, and any updates regarding its near-term thrilling vehicle sales and plans.
“We think we can turn it around,” Jacobson told CNBC’s Phil LeBeau on Tuesday heedless of China. He said the automaker has several meetings scheduled with its Chinese partners regarding the restructuring, including tariff cuts.
Shares of GM were up about 36% this year as of Monday’s close of $48.93. The stock has been increased by billions of dollars in buybacks by GM, which have led to a 19% year-over-year reduction in outstanding shares.
Correction: The automaker tightened its net takings attributable to common stockholders, which excludes some dividend payouts, to between $10.4 billion and $11.1 billion, or $9.14 and $9.64 per portion. An earlier version misstated a figure.