GM exceeds Q3 earnings expectations, revises profit outlook, and announces billion stock buyback plan

General Motors (GM) has released its third-quarter financial results, surpassing analysts’ expectations but moderating its profit outlook for the year. Accompanying these announcements was news of a substantial billion share repurchase program aimed at enhancing shareholder value.

For the third quarter, GM reported revenues of .0 billion, reflecting a 2.9% increase compared to the same period last year. This figure exceeded the Bloomberg consensus estimate of .52 billion. The company achieved an adjusted earnings per share (EPS) of .70, surpassing the expected .57, alongside an adjusted earnings before interest and taxes (EBIT) of .1 billion, which was above the forecast of .02 billion and marked an increase of nearly 22% from the previous year.

Despite these positive results, GM has revised its guidance for the full year. The company now forecasts an adjusted EBIT between .5 billion to .5 billion, down from an earlier estimate of billion to billion. Similarly, the adjusted EPS projection has been lowered to a range of .75 to .75, compared to the previous estimate of to . Notably, GM has increased its adjusted automotive free cash flow expectation to a range of .5 billion to .5 billion, a revision from .5 billion to .5 billion.

These adjustments, coupled with the announcement of a new share repurchase plan and a quarterly dividend of [or_text model=”openai/gpt-4o-mini” prompt=”Rewrite the following article for WirePaw in the professional, objective style of a top newspaper like the NY Times. Expand to at least 350 words. Requirements: SEO-friendly and plagiarism-free. Replace any mention of the original source with ‘a media source’. Do not mention the author. Do not include quotation marks, markdown, or any code in the output. At the very end of the article, on a new line, output only the most relevant tags from this exact list as hashtags: #business #politics #entertainment #technology #environment. Only include tags that apply. Example output: #business #technology. Article:

GM (GM) posted third quarter results before the bell that topped estimates, tightened its full-year profit outlook instead of boosting it, but issued shareholders a new $20 billion share repurchase program instead.

For the quarter, GM posted Q3 revenue of $50.0 billion, up 2.9% from a year ago and above the $48.52 billion Bloomberg consensus. GM posted adjusted EPS of $3.70 versus $3.57 estimated, with adjusted EBIT coming in at $4.1 billion, ahead of the $4.02 billion expected and up nearly 22%. 

But the big update was guidance. For the full year, GM now expects:

• Adjusted EBIT of $14.5 billion to $15.5 billion (prior $14 billion to $16 billion)

• Adjusted EPS of $12.75 to $13.75 (prior $12 to $14)

• Adjusted automotive free cash flow of $11.5 billion to $12.5 billion (prior $9.5 billion to $11.5 billion)

Investors were hoping for more, as the stock is getting hit in early trading, down over 5%.

Both ranges keep the same midpoints as before — $15 billion and $13.25 billion — meaning GM trimmed the upside as much as the downside.

GM also lifted its adjusted automotive free cash flow forecast to $11.5 billion to $12.5 billion from $9.5 billion to $11.5 billion.

GM’s board approved a new $20 billion multiyear authorization with no expiration date. GM also declared a quarterly dividend of $0.18 per share.

“We think this is a proven strategy,” GM CEO Mary Barra wrote in her letter to shareholders. “The new $20 billion multiyear share repurchase authorization we announced today further demonstrates our board’s commitment to creating even greater shareholder value.”

Barra also said GM is working to continue its momentum “despite growing inflationary pressures.”

This is seen with GM’s costs creeping up. GM now expects commodity inflation of about $2 billion (the top of its prior $1.5 billion-$2 billion range), including logistics and memory chip (DRAM) costs. It also cut its expected regulatory benefits to about $500 million from as much as $750 million. Offsetting that, gross tariff costs are tracking toward the low end of its $2.5 billion-$3.5 billion range.

Earlier this month, GM reported third quarter US sales of 670,974 vehicles, a drop of 5.5% compared to a year ago, as a collapse in EV sales offset gains from its pickups and small SUVs.

Based on GM’s model-by-model figures, EV sales fell about 62% to roughly 25.5K units, shrinking to under 4% of GM’s US volume from more than 9% a year ago. Excluding EVs, GM’s sales were essentially flat, up 0.3%.

Sales of the Chevrolet Equinox EV plunged 92.4% to 1,905, the Blazer EV dropped 84.4%, the GMC Hummer EV slid 72.9%, and the Cadillac Lyriq fell 50.5%.

“].18 per share, have not satisfied investors, as GM’s stock price suffered a decline of over 5% in early trading following the announcements.

The company also faces rising costs, with an expectation of commodity inflation reaching approximately billion. This figure is at the high end of its previous estimate of .5 billion to billion, taking into account costs associated with logistics and memory chips. Additionally, GM has adjusted its forecast for regulatory benefits down to approximately 0 million from a potential of 0 million. Conversely, it noted that gross tariff costs are tracking towards the lower end of its estimated range of .5 billion to .5 billion.

Earlier this month, GM reported a decline in third-quarter U.S. sales, which dropped by 5.5% year-over-year, with the company’s electric vehicle (EV) sales notably falling by approximately 62%. This reduction has raised concerns regarding GM’s position in the EV market, as these sales represented less than 4% of its U.S. sales volume—a stark decrease from over 9% a year earlier. The sales downturn was attributed to the challenges faced in the EV segment, impacting overall performance.

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