Key Metrics
- Adjusted EBIT:
- GM North America: $3,982 million (12.9% yoy)
- GM International: $42 million (-88.2% yoy)
- GM Cruise: $(383) million (47.7% yoy)
Forward guidance
- Full-Year 2024 EBIT Guidance: Adjusted EBIT expected in the range of $14 billion to $15 billion.
- Full-Year 2024 EPS Guidance: Adjusted diluted EPS projected between $10.00 and $10.50.
- Adjusted Automotive Free Cash Flow: Increased guidance to $12.5 billion to $13.5 billion for full-year 2024.
- EV Production Target: On track to produce and wholesale approximately 200,000 EVs in North America in 2024.
- 2025 EBIT Outlook: Anticipated results for 2025 expected to be in a similar range to 2024's robust performance.
- Share Count Reduction Goal: Targeting to reduce outstanding shares to less than 1 billion by early 2025.
- EV Profitability Improvement: Expecting a $2 billion to $4 billion reduction in EV losses in 2025.
Key takeaways
- Positives:
- Mary Barra noted, "We have been able to grow our retail market share in the U.S. with above-average pricing, well-managed inventories and below-average incentives," indicating strong demand and effective inventory management.
- GM expects full-year EBIT adjusted to be in the range of $14 billion to $15 billion, reflecting robust financial performance and operational efficiency.
- The company is on track to produce and wholesale about 200,000 EVs in North America this year, with plans to make EVs profitable on an EBIT basis quickly, showcasing commitment to EV growth.
- Barra highlighted, "Our strategic portfolio of EVs is separating GM from our competitors," as GM earned the number two EV sales position, capturing nearly 10% of the market.
- Paul Jacobson stated, "We achieved $4.1 billion in EBIT adjusted, 8.4% EBIT-adjusted margins," demonstrating strong profitability despite challenges.
- Negatives:
- Barra acknowledged, "The competition is fierce, and the regulatory environment will keep getting tougher," indicating potential headwinds from increased competition and regulatory pressures.
- Jacobson mentioned warranty costs increased by $700 million year-over-year due to inflationary pressures and quality issues, which could impact profitability.
- The operating environment in China remains challenging, with Jacobson noting, "GM International third quarter EBIT-adjusted was $50 million, down $300 million year-over-year," reflecting ongoing struggles in that market.
- Jacobson also indicated, "We expect lower earnings in the fourth quarter," due to production downtime and seasonal impacts, suggesting potential volatility in future earnings.
- Barra expressed caution regarding the EV market, stating, "We believe that we can turn around the losses," in China, highlighting uncertainty in that region's performance.
Peer Summary
- Ford Motor Co: Ford anticipates a $10 billion adjusted EBIT, impacted by supplier disruptions leading to lower volumes. Rising warranty costs and pricing pressures in the EV segment, projected to incur a $5 billion loss, highlight competitive challenges. Jim Farley noted, "No OEM is immune," indicating a tough pricing environment across the sector.
- Tesla Inc: Tesla expects 20% to 30% vehicle growth in 2025, despite a decline in order volumes industry-wide. The company faces reduced average selling prices due to financing incentives, which could pressure margins. Elon Musk acknowledged potential external risks, stating, "if there's some force majeure events... we can't overcome massive force majeure events."
- Rivian Automotive Inc: Rivian reaffirmed production guidance of 47,000 to 49,000 vehicles, but faces production challenges due to supply chain issues. The consumer backdrop is challenging, with demand negatively impacted by disruptions, as noted by Claire McDonough.
- PACCAR Inc: PACCAR reported strong earnings but acknowledged gross margins under pressure due to rising costs. The normalization of the used truck market in North America could impact future sales, with Preston Feight noting, "They've been probably reluctant... to make the capital truck purchases."
