Perspectives, analyses et bien plus

General Motors (GM), one of the largest and most influential automakers in the world, has delivered strong Q3 Fiscal 2024 results, outperforming expectations and raising its full-year guidance for the third time this year. With robust performance in internal combustion engine (ICE) vehicles and promising strides in electric vehicle (EV) sales, GM’s financial results underscore its ability to adapt to market dynamics and deliver value to investors.

In this blog, we break down GM’s latest earnings, revenue trends, and projections to highlight its position in the competitive automotive landscape.

General Motors: An Overview

Founded in 1908, General Motors has been a trailblazer in the automotive industry, with a strong legacy of innovation. GM operates under multiple well-recognized brands, including:

• Chevrolet
• GMC
• Cadillac
• Buick

Core Business Segments

1. GM North America (GMNA): Focus on trucks, SUVs, and expanding EV market.
2. GM International (GMI): Sales in markets outside the United States, including China and South America.
3. GM Financial (GMF): Auto financing, leasing, and insurance solutions.
4. Cruise: GM’s autonomous driving division focused on self-driving vehicles.

GM’s Latest Earnings Report (Q3 Fiscal 2024)

GM delivered impressive results for Q3 Fiscal 2024, surpassing Wall Street expectations and showcasing strong operational performance.

Key Financial Highlights

• Revenue: $48.757 billion (10.5% higher year-over-year)
  • Outperformed Bloomberg estimates of $44.69 billion.
• Adjusted Earnings Per Share (EPS): $2.96.
  • Significantly exceeded expectations of $2.44.
• EBIT-Adjusted Profit: $4.115 billion.
  • 15.5% growth compared to the previous year.
• EBIT-Adjusted Margin: Increased to 8.4%, up from 8.1% year-over-year.

GM stock responded positively, jumping nearly 8% in early trading following the earnings announcement.

GM Revenue Breakdown by Segments

The revenue breakdown of General Motors is given below for better understanding.

GM North America (GMNA)

• Vehicle Deliveries: 659,601 vehicles (down 2% year-over-year).
• Retail Sales: Increased by 3%, driven by pickups and full-size SUVs.

Electric Vehicles (EVs)

• Total EV sales reached 32,195 units, marking a 60% increase year-over-year.
• Despite a drop in Bolt EV sales, other models like the Cadillac LYRIQ offset the decline.
• GM remains focused on achieving EV profitability by cutting production costs by $2-4 billion by 2025.

GM Financial

GM Financial continues to provide a solid revenue stream through financing and leasing operations, contributing to the company’s strong cash flow.

Cruise (Autonomous Vehicles)

GM remains committed to Cruise as a long-term growth opportunity, though specific earnings contributions were not highlighted in Q3.

GM Revenue Trends: Year-on-Year Analysis

• Q3 2023: Revenue of approximately $44.1 billion.
• Q3 2024: Revenue surged to $48.78 billion, representing 10.5% year-over-year growth.
• EBIT-Adjusted Profit: Increased by 15.5%, reaching $4.115 billion in Q3 2024.

Key Drivers of Revenue Growth:

• Strong sales of pickups and full-size SUVs in North America.
• Increasing traction in the EV segment, with 60% growth in EV unit sales.
• Improved profitability through cost optimization and operational efficiency.

Factors Driving GM’s Revenue Growth

The factors behind the growth of General Motor’s revenue are mentioned below:

1. Electric Vehicle (EV) Growth

• GM delivered 32,195 EVs in Q3, marking a 60% increase from the prior year.
• Focus on EV profitability by cutting costs and scaling production to achieve positive EBIT margins.
• GM’s Ultium platform remains the backbone of its EV lineup.

2. SUV and Truck Demand

• Full-size SUVs and pickups continue to be GM’s most profitable segments.
• GM delivered more vehicles than any other automaker in the U.S. during the quarter.

3. Automotive Cash Flow Strength

• GM raised its guidance for automotive operating cash flow to $22-$24 billion, up from the prior range of $19.2-$22.2 billion.
• Adjusted automotive free cash flow increased to $12.5-$13.5 billion.

4. Cost Optimization

• GM CFO Paul Jacobson emphasized a focus on reducing EV costs by $2-$4 billion by 2025.

Challenges Impacting GM’s Earnings

Despite its strong performance, GM faces several challenges:

1. Supply Chain Disruptions: Semiconductor shortages continue to affect production capacity.
2. Competitive Pressure: Intense competition from Tesla and other EV manufacturers.
3. Regulatory Environment: Tougher emission standards and EV mandates increase production costs.
4. Scaling EV Production: Lower-than-expected EV production volume (200,000 units, at the low end of the target range).

GM’s Future Outlook and Projections

GM raised its full-year 2024 guidance for the third time, signaling confidence in its operational performance.

Updated Full-Year 2024 Guidance

• Adjusted EBIT: $14 billion to $15 billion (previously $13-$15 billion).
• Automotive Operating Cash Flow: $22 billion to $24 billion (up from $19.2-$22.2 billion).
• Adjusted Automotive Free Cash Flow: $12.5 billion to $13.5 billion (previously $9.5-$11.5 billion).
• Diluted-Adjusted EPS: $10 to $10.50 (previously $9.50-$10.50).

2025 Projections

• GM expects adjusted EBIT in 2025 to be in a similar range to 2024 results.
• The focus will remain on scaling EV production, improving EV margins, and maintaining dominance in profitable ICE vehicle segments.

Conclusion

General Motors’ Q3 2024 results highlight the company’s ability to outperform market expectations while adapting to an evolving automotive landscape. With a 10.5% increase in revenue, strong EBIT margins, and rising EV sales, GM has delivered an impressive performance.

CEO Mary Barra’s focus on optimizing ICE margins and achieving EV profitability positions GM for sustainable growth, despite industry challenges. Looking ahead, GM’s updated guidance and long-term strategy underscore its commitment to innovation and shareholder value.