General Motors: Q4 Earnings Beat, 2025 Outlook Mixed

Key Points:

* Revenue increased 11% to $47.70 billion, surpassing estimates.
* Adjusted EPS of $1.92 exceeded consensus expectations.
* Full-year 2024 adjusted EBIT reached $14.9 billion.
* 2025 profit guidance range of $13.7 billion to $15.7 billion, with potential headwinds from EV regulations.
* GM credits EV and China business improvements for Q4 results.
* EV sales fell short of projections but remain a growth area.

Financial Results:

In the fourth quarter, General Motors (GM) reported:

* Revenue: $47.70 billion (up 11% YoY)
* Adjusted EPS: $1.92 (vs. $1.83 consensus)
* Adjusted EBIT: $2.50 billion (up 42.8% YoY)

Outlook:

For 2025, GM forecasts adjusted profit of $13.7 billion to $15.7 billion, slightly below the high end of its 2024 guidance. Diluted and adjusted EPS are expected to range from $11.00 to $12.00.

Challenges:

GM faces potential challenges from the Biden administration's proposed EV regulations, which could impact its manufacturing footprint and EV business. Additionally, the automaker anticipates modest headwinds in wholesale volumes and a pricing decline in North America.

EV Growth:

Despite supply chain constraints, GM's EV business continues to grow. The company sold 189,000 EVs in 2024, slightly below its target. GM projects EV sales to reach 300,000 in 2025, contributing $2 billion to $4 billion in earnings tailwinds.

Strategic Moves:

GM has implemented a new share buyback plan, repurchased $6 billion of outstanding shares, and increased its dividend payout by 33%. Management plans to explore additional share buyback opportunities if possible.

Conclusion:

GM's Q4 results demonstrate continued financial strength, driven by improvements in its EV and China operations. However, the automaker faces potential headwinds in 2025 from regulatory changes and industry headwinds. Nonetheless, GM remains optimistic about the long-term growth prospects of its EV business.