Updated at 7:01 AM EST
General Motors (GM) – Get Free Report posted better-than-expected fourth-quarter earnings Tuesday, as well as an upbeat 2024 profit forecast tied to what the carmaker described as a “resilient” U.S. economy.
GM has been working to cut costs and improve efficiencies since the summer. It accelerated those plans after settling its dispute with the United Auto Workers union in late October and agreeing to boost salaried workers’ pay by around 25% over the next five years.
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The overall cost increase over that period, GM said, will be around $9.3 billion. The carmaker also noted that as part of that cost-cutting drive, it would not advertise during the 2024 Super Bowl, marking its first absence from the world’s biggest annual sporting event since 2019.
For the three months ended in December, GM said adjusted earnings came in at $1.24 a share, down 41.5% from the same period in 2022 but firmly ahead of the Wall Street consensus of forecast of $1.16 per share.
Group revenue was $42.98 billion, GM said, a 0.3% dip from a year earlier. But the figure also beat analysts’ consensus forecast of a $38.97 billion tally.
CEO Barra: ‘GM well-positioned’ for 2024
Looking into the coming year, GM sees earnings in the region of $8.50 to $9.50 a share, firmly ahead of the LSEG forecast of $7.87, with pre-tax profit of between $12 billion and $14 billion.
“As we begin 2024, I believe GM is well positioned for a year of strong financial performance that will build on everything we accomplished — and learned — in 2023,” CEO Mary Barra told investors in her regular letter to shareholders.
Mary Barra, chairwoman and CEO of General Motors, during an Automotive Press Association event in Detroit on Monday, Dec. 4, 2023. Photographer: Jeff Kowalsky/Bloomberg via Getty Images
“Consensus is growing that the U.S. economy, the job market and auto sales will continue to be resilient, and at GM, we expect healthy industry sales of about 16 million units with the mix of EVs continuing to grow,” she added.
“In our EV business, we expect our U.S. portfolio will become variable profit positive in the second half of the year based on our current expectations for EV demand and production growth, strong interest in our vehicles, lower commodity prices and other factors,” Barra noted.
GM shares were marked 7.5% higher in premarket trading to indicate an opening bell price of $38.06 each, a move that could nudge the stock into positive territory for the year.
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