General Motors tumbles despite earnings beating forecasts, EVs into the black
Published: 09:52 28 Jan 2025 EST
General Motors Company (NYSE:GM) shares fell 8.4% to $50.30 in early trading on Tuesday even though the Chevrolet, Cadillac, GMC and Buick maker reported better than expected earnings and its EV business was "variable profit positive" for the first time.
The auto manufacturer reported a fourth-quarter net loss of $3 billion and adjusted earnings of $2.5 billion, with net income reduced by more than $5 billion, mainly from restructuring and impairment changes relating to its China joint ventures that was confirmed in December.
Adjusted earnings per share of $1.92 beat the average Wall Street estimate of $1.83, on revenues of $47.7 billion that were also higher than the $44.46 billion expected.
In its outlook for 2025, GM guided to adjusted EPS in a range of $11 to $12, better than the current Street consensus of $10.60.
GM said the guidance "assumes a stable policy environment in North America" and an estimated $500 million benefit from lower costs from its Cruise robotaxi business, which it decided to stop funding last year.
The guidance also includes anticipated capital spending of $10-11 billion, including investments in battery cell manufacturing joint ventures.
CEO Mary Barra said the company will offer three new Cadillac electric vehicles and is targeting further improvements in EV profitability as this part of the business gains scale, while also seeing the full-year impact of the new gas-powered SUVs launched in 2024.
"Of course, there is uncertainty over trade, tax, and environmental regulations and we have been proactive with Congress and the administration," Barra said.
"In our conversations, we have stressed the importance of a strong manufacturing sector and American leadership in advanced technologies. It’s clear that we share a lot of common ground, and we appreciate the dialogue.
"Whatever happens on these fronts, we have a broad and deep portfolio of ICE vehicles and EVs that are both growing market share, and we’ll be agile and execute as efficiently as possible."
