GM Q1 2024 Earnings: Revenue, Profit and Outlook

General Motors reported a stronger-than-expected first quarter despite a modest decline in U.S. vehicle unit sales. The automaker’s net income rose more than 25%, driven by robust deliveries of pickup trucks and other higher-margin vehicles. GM said average transaction prices were slightly lower than a year ago, at just under $50,000, but it has not seen the broad price erosion affecting some competitors. (All figures are in U.S. dollars.)

For the quarter ended in March, GM posted net income of $2.97 billion, a gain of more than 25% year over year, with revenue up 7.6% to just over $43 billion. The top-line result beat the FactSet consensus, and adjusted EPS of $2.62 outpaced analyst expectations of $2.13 per share.

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Q1 takeaways for investors

Analysts and market watchers highlighted GM’s focus on profitability and cost control as central to the quarter’s performance. Wedbush analyst Dan Ives described the results as a “prove me” quarter that suggests the long-awaited turnaround under CEO Mary Barra is gaining traction. The company raised its full-year net income guidance modestly to a range of $10.1 billion to $11.5 billion, up from prior guidance of $9.8 billion to $11.2 billion. Adjusted 2024 EPS guidance was increased to $9.00–$10.00 from $8.50–$9.50.

Analysts had been looking for full-year earnings around $8.89 per share. The earnings beat and raised guidance prompted a positive stock market response, with shares up more than 5% in early trading. The company is also planning a move of its Detroit headquarters to a new downtown office building next year.

GM trims prices while EV sales and battery production rise

GM’s Chief Financial Officer, Paul Jacobson, said that the small decline in average transaction price was driven in part by a larger mix of lower-cost vehicles in the quarter, including the Chevrolet Trax small SUV, which has a starting price of $21,495 including shipping. Despite that shift, Jacobson emphasized that the overall product portfolio has remained healthy and that pickup truck sales in the U.S. rose about 3% year over year.

The company continues to assume a modest price decline of roughly 2% to 2.5% for the full year, but Jacobson said that broader price erosion across the lineup has not materialized so far.

Retail sales of electric vehicles increased during the first quarter, and GM is accelerating in-house battery production. The automaker expects to reach a mid-single-digit profit margin on EVs next year as it scales production and benefits from lower battery cell costs and reduced raw material prices. CEO Mary Barra noted “good early sales momentum” for models such as the Cadillac LYRIQ electric SUV and pointed to a significant drop in battery cell costs as a contributor to improving EV economics.

Battery module production has surged—GM reported a roughly 300% increase over the past six months—and the company expects to double current capacity by the end of the summer. Barra said improved module availability should allow higher vehicle production and help win additional EV customers in the U.S. market.

GM’s conference call

On the company’s conference call, Jacobson said dealer and customer response to price adjustments for the 2024 Blazer EV has been positive. Regionally, GM generated $3.84 billion in pre-tax earnings in North America during the quarter, while international operations recorded a $10 million pre-tax loss that includes a $106 million loss in China. Barra acknowledged a challenging multi-year period in China—affected by the pandemic and supply chain issues—but reiterated GM’s long-term commitment to the market and its potential for medium-term growth.

The Cruise autonomous vehicle unit continued to weigh on results, reporting a pretax loss of $519 million as it works to recover from a serious crash and related regulatory and reputational issues in California. Cruise has resumed limited testing in Phoenix to update maps and gather driving data after suspending some operations, and management expects full-year Cruise expenses to be roughly $1.7 billion.

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