General Motors (GM, Financial) saw its shares climb by 4.6% following the announcement of impressive Q1 earnings. The company not only exceeded expectations for EPS and revenue but also marked its most significant EPS beat since Q1 of the previous year. Amidst economic challenges and a slowdown in the EV market, GM's upward revision of its FY24 adjusted EPS to $9.00-10.00 from $8.50-9.50, along with an increase in FY24 adjusted EBIT guidance to $12.5-14.5 billion from $12-14 billion, was a welcome surprise for investors.
Key highlights from the report include:
- Adjusted EBIT rose by 1.8% year-over-year to $3.87 billion in Q1, with a 9.0% adjusted EBIT margin compared to 9.5% in the same period last year. The North America adjusted EBIT margin stood at 10.6%.
- GM expanded its market share in the US, driven by strong performance in its truck business and new small SUVs like the Chevrolet Trax and the Buick Envista, attracting new customers.
- The company observed stable pricing trends, with Q1 pricing down only about $200 million year-over-year, and expects to maintain this consistency.
- Retail sales increased by 6%, while fleet sales saw a more than 20% decline due to production constraints, which GM anticipates recovering in the second half of 2024.
- GM adjusted EV pricing, notably reducing the price of the 2024 Blazer EV, and remains confident in achieving positive variable profit for its EV portfolio in the latter half of 2024.
Investors are particularly encouraged by GM's raised guidance and its ability to maintain profitability forecasts for its EV segment, despite pricing concerns. The company's focus on high-margin full-size trucks and strategic production adjustments underscore its strong performance and outlook. This positive momentum is also seen as a good sign for Ford (F, Financial), which is set to report its results soon.
