GM Earnings Report Preview: Strong Sales, EV Challenges Persist

Analysts' Expectations

For its fourth quarter, analysts anticipate that General Motors (GM) will report:

* Revenue: $44.46 billion (up from $42.98 billion in Q4 2023)
* Adjusted EPS: $1.83 (on adjusted net income of $1.954 billion)
* Full-year 2025 guidance:
* Adjusted EBIT: $14-15 billion
* Automotive operating cash flow: $22-24 billion
* Adjusted automotive free cash flow: $12.5-13.5 billion
* Diluted-adjusted EPS: $10-10.50

Strong Sales Drive Profitability

GM's sales have been a major driver of its profitability. In Q4, sales climbed 21% year-over-year, propelled by strong demand for full-size pickups and SUVs. This helped GM achieve its fifth consecutive year of sales growth in the full-size pickup segment, reaching its highest level since 2007.

EV Challenges: Slower Growth, Cost Reduction Plans

While GM's EV business has seen success with models like the Cadillac Lyriq and Chevrolet Equinox EV, growth has not met initial expectations. GM has revised its EV production target to 200,000 units, down from a range of 200,000-250,000.

Despite these challenges, GM remains committed to EV profitability. It aims to achieve this by reducing costs by $2-4 billion in 2025.

Other Challenges: Autonomous Tech Restructuring, China Writedown

GM has faced challenges beyond its EV business. In Q4, it merged its autonomous Cruise business and took a $5 billion writedown in its China joint venture. Additionally, trade tensions with Canada, Mexico, and China pose risks to its operations.

Investor Focus: Guidance on EV Challenges, Trade Issues

Investors will closely monitor GM's earnings report for updates on its EV outlook, self-driving technology plans, and potential impact of trade issues.