GM (GM) investors are looking for the Big Three automaker to continue its strong run of quarterly performance, with Q4 results on deck for Tuesday morning.
The six-week United Auto Workers (UAW) strike against GM concluded at the end of October, impacting GM production at select plants for about a month in Q4. GM said the strike cost the automaker around $200 million in the last two weeks of September, and another $600 million in the first three weeks of October.
Nevertheless, GM said its overall results for the quarter, and the year, should only suffer limited impact due to GM’s “exceptional portfolio of vehicles,” the company said in late November. GM reinstated its full-year outlook, expecting adjusted EBIT (earnings before interest and taxes) of $11.7 billion to $12.7 billion, compared to its previous outlook of $12.0 billion-$14.0 billion. Wall Street will be keen to see where 2024’s full-year adjusted EBIT outlook will be compared to GM’s initial 2024 goal.
In addition to reinstating its profit outlook last November, GM revealed a $10 billion “accelerated share repurchase” (ASR) program with the intention of boosting its common stock dividend by 33% starting in January. As opposed to a traditional staged share buyback, GM says its program will begin immediately.
Looking ahead to Q4 expectations, GM is expected to report topline revenue of $39.53 billion per Bloomberg estimates, down from the $43.1 billion the company reported in Q4 2022. On the profitability front, GM is expected to report adjusted EPS of $1.16, on adjusted net income of $1.535 billion.
Despite the work stoppage, GM’s sales for Q4 were not dramatically affected, as the company said it had built up sufficient inventory in anticipation of strike. Earlier in January GM reported Q4 US sales increased 0.3% compared to the same period a year ago with roughly 625,176 cars and trucks sold.
Overall, GM said sales jumped 14.1% to 2.6 million vehicles for 2023, making it the company’s best year since 2019. The automaker also grew its market share by 0.3% to 16.3% overall in the US. GM said it was No. 1 in full-size pickup sales in the US (841K units) and No. 1 in full-size SUV sales (245,000 units).
GM also forecast total US auto industry sales to hit 16 million in 2024, which would be a strong improvement post-pandemic; only 13.4 million vehicles were sold in 2022, the lowest in a decade.
As for its EV ambitions, GM has suffered some hiccups with its once-aggressive rollout (even as the Equinox EV and Escalade IQ are coming out this year.) GM, which abandoned its goal of building 400,000 EVs through mid-2024, said it still expects to have 1 million units of EV capacity by 2025 and achieve mid-single-digit EBIT margins by then as well.
Another hiccup for GM involved issues related to its Cruise AV business unit. In November Cruise paused all autonomous activities across the country with its robotaxis after an accident where a Cruise robotaxi ran over a woman, stopped on top of her, and then dragged her for about 20 feet before pulling over. The woman suffered severe injuries from the accident. A few weeks later Kyle Vogt, CEO of GM’s Cruise autonomous driving division, announced he was resigning from his role and leaving the company.
Late last week Cruise revealed it was under investigation by the Department of Justice and SEC, among other regulatory bodies, concerning the incident with the pedestrian who was dragged and Cruise’s actions in the immediate aftermath of the event.
Analysts and investors will be on the lookout to hear what’s next for Cruise and GM’s autonomous ambitions.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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