Home Stocks General Motors Stock Shifts into High Gear After Crushing Earnings

General Motors Stock Shifts into High Gear After Crushing Earnings

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The firm appears confident that the U.S. car buyer will remain resilient in 2024

Shares of General Motors (NYSE:GM) accelerated past $50 for a 9% gain Tuesday morning as traders weighed the Detroit-based automaker’s handy Street beats.

For the third quarter of 2024, General Motors generated revenue of $48.8 billion versus analysts’ consensus estimate of $44.7 billion, along with earnings of $2.96 per share, beating Wall Street’s call for $2.38 per share.

The automaker also showed marked year-on-year improvement in the company’s top-line and bottom-line results and increased its full-year 2024 net income guidance range.

GM results suggest consumer resilience

General Motors’ third-quarter 2024 results seem to suggest that U.S. automotive buyers have been resilient despite high auto-loan interest rates. The firm’s Chief Financial Officer, Paul Jacobson, emphasized this point, arguing that “the consumer has held up remarkably well for us”.

Jacobson’s claim is evidenced by GM’s Q3 results, with the automaker’s revenue totaling $48.8 billion versus $44.1 billion in the year-earlier quarter, and well above the $44.7 billion that analysts had expected.

Turning to the bottom-line results, General Motors reported adjusted earnings of $2.96, a notable increase over the $2.28 per share earned in the year-earlier period. Additionally, General Motors handily beat the analysts’ consensus earnings estimate of $2.38 per share.

General Motors boosts market’s enthusiasm with guidance hikes

Certainly, Jacobson and General Motors don’t expect America’s consumers to lose their resiliency in the fourth quarter. After all, the Federal Reserve is lowering interest rates, and this should make it easier for people to make interest payments on their new vehicles.

Consequently, General Motors raised its full-year 2024 guidance range on net income attributable to stockholders from between $10 billion and $11.4 billion, to between $10.4 billion and $11.1 billion. Moreover, General Motors hiked the lower end of its adjusted 2024 EPS outlook range from between $9.50 and $10.50, to between $10 and $10.50.

The automaker also gave its 2024 adjusted automotive free cash flow (FCF) guidance range a boost of around 20%, signaling confidence that the U.S. car buyer will remain quite resilient in 2024.

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David Moadel
Financial Writer

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