After a strong 2023 and 2024 with positive retail sales growth, General Motors (GM) investors are hoping the Big 3 automaker can maintain its earnings momentum with first-quarter results to be released Tuesday morning. Are expected.
GM's top sales for the quarter are expected to be $42.09 billion (according to Bloomberg consensus), up 5% from a year ago but lower than the previous quarter's sales of $43 billion. In terms of earnings, the Street expects GM to post adjusted earnings of $2.12 per share, on adjusted net income of $2.42 billion and operating income of $3.12 billion.
Sales are expected to increase 5%, due to higher labor costs due to a new collective bargaining agreement with the United Auto Workers (UAW), weak international sales (particularly in China), and higher overseas costs. GM's adjusted net income could fall by nearly 22%. The EV business may put pressure on profits.
Although EV sales were on an improving trend in 2024, GM had to take a $1.7 billion hit in the fourth quarter in losses related to existing EV inventory.
Investors will be watching for any updates on GM's 2024 outlook. GM earlier this year expected adjusted EBIT in 2024 to be between $12 billion and $14 billion, and adjusted EPS for the same year to be between $8.50 and $9.50.
“Given the longer-term bullish pricing than expected, we believe GM could raise its guidance as early as this quarter,” Deutsche Bank's Emanuel Rosner said in a letter to clients early last week. “There is,” he said.
As for deliveries in the quarter, GM reported better-than-expected first-quarter sales in the U.S., but were down year-over-year due to lower fleet sales. GM delivered 594,233 vehicles, down 1.5% from the previous year. However, retail sales he increased by 6%. GM also said it delivered more vehicles in the first quarter than any other U.S. automaker.
Digging deeper into GM's EV sales, the company reported big increases for the Cadillac LYRIQ, Hummer EV, and Silverado EV. The Silverado EV was available only to fleet customers, but GM said it will begin deliveries to retail customers “in the coming months.”
Chevrolet's Blazer EV sold just 500 units in the quarter, but it only went on sale again in March after being halted due to software issues. Looking ahead, the long-awaited Equinox EV is expected to go on sale in the second half of the second quarter. According to GM, the Equinox EV will cost around $35,000.
The ability of GM and other legacy automakers to leverage sales of traditional gasoline powertrain vehicles allows them to overcome the current downturn in EV demand that is impacting major EV manufacturers with minimal overall sales losses. I was able to get through it.
GM's rollout lacks hybrid vehicles, which have recently become popular. GM announced in its fourth quarter earnings report that it will introduce plug-in hybrid technology to some vehicles in North America.
Earlier this year, GM Chief Financial Officer Paul Jacobson also reiterated the company's goals for EV profitability in a roundtable discussion with reporters. “Profitability will not reach low single digits.” [EBIT EV margin] Until 2025,” he said.
GM has abandoned its goal of producing 400,000 EVs by mid-2024, but did not say whether it expects to maintain production capacity of 1 million EVs by 2025.
Finally, investors will be looking for new updates on GM's self-driving division, Cruise. The force ceased all operations last year following accidents involving pedestrians and other incidents involving vehicles. After a management reshuffle, Cruise is rumored to resume operations in Phoenix with vehicles equipped with human co-pilots.
Pras Subramanian is a reporter for Yahoo Finance.you can follow him twitter And even more Instagram.
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