General Motors (GM) Q4 Results
General Motors beat Wall Street’s expectations in the fourth quarter with strong results both on the top and bottom lines. The company’s adjusted earnings per share was $2.12, beating the expected $1.69, and revenue was $43.11 billion, beating the expected $40.65 billion. The full-year 2022 revenue came in at $156.7 billion, with a net income of $9.9 billion and adjusted earnings before interest and tax of $14.5 billion.
Margin Squeeze
However, General Motors showed signs of a margin squeeze, with its net income slipping by less than 1% from full-year 2021 and a profit margin that was off 1.6 percentage points to 6.3%. Its adjusted profit margin was 9.2%, down 2.1 percentage points compared with the previous year. The company incurred special charges in the fourth quarter of $511 million related to a buyout program for its Buick dealers and $657 million related to shuttering its limited operation in Russia.
2023 Guidance
For 2023, General Motors expects net income to be between $8.7 billion and $10.1 billion, with adjusted earnings before interest and taxes of $10.5 billion to $12.5 billion and adjusted earnings per share of between $6 and $7. The results are expected to be below 2022 earnings but above average analyst forecasts. General Motors forecasts net automotive cash from operating activities to be between $16 billion and $20 billion, with automotive free cash flow of $5 billion to $7 billion.
Strong Demand
Despite some concerns of “demand destruction”, GM’s CFO Paul Jacobson said that demand and pricing for the company’s vehicles remain strong. He said the underlying business is expected to be consistent with what was seen last year and that General Motors is being “appropriately cautious”. General Motors will execute a $2 billion cost-cutting plan over the next two years, with up to half of the savings expected this year.
Electric Vehicles (EVs)
GM CEO Mary Barra described 2023 as a “breakout year” for the company’s electric vehicle (EV) business, with the introduction of more mainstream products and increases in production of current models. Barra confirmed GM’s revised plans to produce 400,000 EVs in North America by the first half of next year. The company also announced an equity investment of $650 million in Lithium Americas Corp. to develop a lithium mine in Nevada, with General Motors receiving exclusive access to phase one of production.
Brief about Gerneral Motors (GM)
General Motors (GM) is a multinational corporation based in Detroit, Michigan, that designs, manufactures, and sells vehicles and vehicle parts globally. General Motors operates through four business segments: GM North America, GM International, GM Cruise, and GM Financial. The company’s brands include Chevrolet, GMC, Cadillac, Buick, and many others. GM is one of the world’s largest automotive companies and has a rich history dating back to 1908. The company has been instrumental in shaping the automobile industry and has a strong presence in the global market.