Anticipating General Motors' Earnings: Wall Street's Expectations Ahead of the Bell

30 janvier 2024

Detroit-based automotive giant General Motors (GM) is poised to unveil its financial performance for the fourth quarter before the opening bell on Tuesday. The following insights provide an overview of Wall Street's expectations, as per average estimates gathered by LSEG (formerly Refinitiv).

Analysts anticipate adjusted earnings per share (EPS) to stand at $1.16, coupled with revenue reaching $38.67 billion. These projections signal a noteworthy 10.3% dip in revenue compared to the corresponding period in the previous year, as well as a substantial 45.3% decrease in adjusted EPS. GM's fourth-quarter results for 2022 encompassed $43.11 billion in revenue, net income attributable to stockholders totaling $2 billion, and adjusted earnings before interest and taxes amounting to $3.8 billion.

Beyond the financial figures, investors will be closely monitoring any residual or unexpected expenses stemming from the company's recently negotiated labor contract with the United Auto Workers union, along with the disclosure of guidance for the year 2024.

Market observers anticipate a "flattish" forecast from GM compared to the preceding year, considering the normalization of favorable vehicle pricing, which had led to record profits in recent times. Simultaneously, cost-cutting measures are anticipated to mitigate the impact of increased labor costs resulting from the UAW agreement.

In a statement issued in November, GM CEO Mary Barra highlighted the company's efforts to finalize a 2024 budget that would comprehensively offset the incremental costs associated with the new labor agreements.

GM reinstated its 2023 guidance in November, encompassing projections for net income attributable to stockholders ranging from $9.1 billion to $9.7 billion, or EPS between $6.52 and $7.02. Additionally, adjusted earnings before interest and taxes are forecasted to range from $11.7 billion to $12.7 billion, corresponding to $7.20 to $7.70 adjusted EPS. The guidance includes an estimated $1.1 billion EBIT-adjusted effect resulting from approximately six weeks of U.S. labor strikes, along with costs related to an accelerated $10 billion share repurchase program announced in November.

Investors are also keenly interested in updates regarding GM's new electric vehicles and developments related to Cruise, GM's majority-owned autonomous vehicle subsidiary, which is currently under investigation by various entities following an October pedestrian accident in San Francisco.

Last week, Cruise and GM disclosed findings from internal investigations into the incident, citing cultural issues, regulatory challenges, and leadership deficiencies within the company. However, the investigations concluded that officials did not intentionally deceive or mislead regulators. Cruise remains under scrutiny from entities such as the U.S. Department of Justice and the U.S. Securities and Exchange Commission.