GM beats quarterly targets, raises forecast for the year

DETROIT — General Motors on Tuesday posted quarterly results that topped Wall Street targets and raised its annual forecast, citing stable pricing and demand for its gas-engine vehicles, sending shares up 5%.

The Michigan automaker upped its adjusted pre-tax profit projection for the year to $12.5 billion to $14.5 billion, from its previous range of $12 billion to $14 billion.

“Our consumer has been remarkably resilient in this period of higher interest rates,” GM Chief Financial Officer Paul Jacobson said.

He said demand held up well in the first quarter and pricing was stable in April, but GM still is planning for pricing to decline 2% to 2-1/2% for the rest of the year.

Despite the company's struggles in China and with EVs, stronger-than-expected vehicle pricing with gasoline-powered trucks pleased investors.

«There… is the reality that the pricing is staying stronger for longer than anybody anticipated,» said Tim Piechowski, portfolio manager at ACR Alpine Capital Research in St. Louis, which owns GM shares.

«The engine of the company is truck and SUV at this point,» he added. «They're just generating substantial profit and free cash flow that will continue to fund the initiatives in EV. Full steam ahead.»

Some analysts were more cautious.

GM could lose additional market share in the near and intermediate term due to its lack of hybrid gasoline-electric vehicles and cash flow will be hampered by heavy planned spending on electric vehicles, CFRA Research analyst Garrett Nelson said in a research note.

The automaker reported that net income in the first quarter rose 24.4% over the year-ago period to $3 billion, on a 7.6% rise in revenue to $43 billion.

Adjusted earnings per share of $2.62 beat the average Wall Street target of $2.15, according to LSEG data. Revenue topped the Wall Street target of $41.9 billion in the March quarter.

While the company started 2024 strong, CEO Mary Barra still has two large challenges ahead: turning around GM's shrinking sales in China, and salvaging Cruise, its robotaxi unit.

Cruise halted operations late last year after one of its self-driving cars dragged a woman down a San Francisco street. Company officials shared earlier this year