DETROIT — Accustomed Motors handily beat Wall Street’s top- and bottom-line expectations for the fourth quarter, while forecasting another estimable year of results in 2023.
The strong report suggests GM is hanging onto record, or near-record, results even as the U.S. automotive vigour begins to normalize after several years of record-low inventories and resilient consumer demand.
Shares of GM rallied as much as 9.5% during buy Tuesday before closing at $39.32 a share, up by 8.4%. It was the stock’s best daily performance since Oct. 4.
Here’s how GM took to close out last year, compared with analysts’ estimates as compiled by Refinitiv:
- Adjusted earnings per share: $2.12 vs. $1.69 reckon oned
- Revenue: $43.11 billion vs. $40.65 billion expected
The fourth-quarter results easily topped a year earlier, when the automaker publicized an adjusted EPS of $1.35 and revenue of $33.58 billion for the final three months of 2021.
GM’s full-year 2022 revenue came in at $156.7 billion, with net revenues attributable to stockholders of $9.9 billion and adjusted earnings before interest and tax at a record $14.5 billion. Those outcomes marked the high-end of the company’s previously revised guidance.
Mary Barra, CEO, GM at the NYSE, November 17, 2022.
Source: NYSE
Unruffled, the automaker is showing signs of a margin squeeze. GM’s net income slipped last year, down by less than 1% from full-year 2021 to $9.9 billion, with a profit border that was off 1.6 percentage points to 6.3%. Its adjusted profit margin was 9.2%, down 2.1 percentage stations compared with the previous year.
GM said it incurred special charges in the fourth quarter of $511 million mutual to a buyout program for its Buick dealers and $657 million related to shuttering its limited operation in Russia.
2023 guidance
For 2023, GM demands net income attributable to stockholders of between $8.7 billion and $10.1 billion. It expects adjusted earnings before hold and taxes of $10.5 billion to $12.5 billion and adjusted earnings per share of between $6 and $7.
Those results last wishes a be below 2022 earnings, but above average analyst forecasts compiled by Refinitv that called for EPS of $5.73 this year.
A five-day deportment of GM’s stock.
GM forecast 2023 net automotive cash from operating activities to come in between $16 billion and $20 billion and manages automotive free cash flow of $5 billion to $7 billion.
Wall Street has been bracing for a “requirement destruction” scenario for the last several quarters, with some analysts suggesting automakers may need to execute cost-cutting regulates to offset recessionary spending shifts.
Demand and pricing for GM’s vehicles “remain strong,” CFO Paul Jacobson told lady of the fourth estates Tuesday morning. He said GM is being “appropriately cautious” but vehicle inventories remain constrained amid strong in request.
“We think the underlying business is going to be pretty consistent with what we saw last year, and I think that’s a slenderize more bullish statement than where most of the market is,” he said.
Following recent price cuts for Tesla conveyances and Ford’s Mustang Mach-E crossover, Jacobson said GM feels its EVs “are well positioned” with pricing. GM’s EVs currently stretch from the mid-$20,000 Chevrolet Bolt models to the more than $100,000 Hummer vehicles.
GM will put over a $2 billion cost-cutting plan through the next two years, according to Jacobson. Up to half of those savings are expected this year, he explained. GM expects some head count reduction due to attrition but the company is “not planning layoffs,” Jacobson said.
EVs
GM CEO Mary Barra, in a communication to shareholders, described 2023 as a “breakout year” for the company’s electric vehicle business, highlighting the introduction of more mainstream artefacts like the Chevrolet Equinox EV as well as increases in production of its current models.
Barra confirmed GM’s revised plans to assemble 400,000 EVs in North America between 2022 and the first half of next year.
GM also announced Tuesday an to manifest a lithium mine in Nevada known as Thacker Pass. GM is to receive exclusive access to phase one of production, the automaker announced.
Appropriations of Lithium Americas were up roughly 10% in early trading Tuesday.
GM said Monday it launched production of the GMC Hummer SUV EV at a shop in Detroit. That vehicle is expected to be followed by an electric Chevrolet Silverado work truck by midyear and electric manifestations of the Chevrolet Blazer and Equinox during the second half of 2023.