GM’s Q4 2023 Earnings: A Big Win or Major Setback?

General Motors (GM) recently released its fourth-quarter earnings report, and investors were eagerly awaiting the results. The preceding data and market estimates painted a picture of anticipated performance, but did GM’s financials meet, exceed, or fall short of expectations?

Key Figures and Performance Metrics

The company’s adjusted earnings per share for Q4 were projected to be $1.16, with an expected revenue of $38.67 billion. This represented a 10.3% decrease in revenue compared to the previous year and a significant 45.3% decline in adjusted earnings per share. The 2022 fourth-quarter results had shown $43.11 billion in revenue, net income attributable to stockholders of $2 billion, and adjusted earnings before interest and taxes of $3.8 billion.

Factors Impacting Performance

Apart from dissecting the quarterly financials, analysts and investors were also keen to discern any residual or unexpected costs stemming from the company’s new labor contract with the United Auto Workers union. Furthermore, attention was directed towards GM’s 2024 guidance, with a close eye on any deviations from the prior year’s earnings results. The normalization of favorable vehicle pricing, which had previously led to record profits, coupled with the offsetting of increased labor costs due to the UAW deal, became key points of interest.

Insights from GM's CEO

Mary Barra, GM’s CEO, had previously provided insights regarding the company’s 2024 budget, affirming that it would address the incremental costs associated with the new labor agreements. Additionally, GM reinstated its 2023 guidance, encompassing net income attributable to stockholders of $9.1 billion to $9.7 billion, or EPS of $6.52 to $7.02, adjusted earnings before interest and taxes of $11.7 billion to $12.7 billion, and adjusted automotive free cash flow of $10.5 billion to $11.5 billion. Notably, these figures included the effects of U.S. labor strikes and costs linked to a share repurchase program.
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Focus on Electric Vehicles and Autonomous Driving

The earnings report also prompted a keen interest in updates pertaining to GM’s new electric vehicles and Cruise, the company’s majority-owned autonomous vehicle subsidiary. Notably, Cruise had been under scrutiny following an accident in San Francisco, with investigations identifying cultural issues, regulatory challenges, and poor leadership, though no deliberate deception or misleading of regulators was found. The ongoing probes by entities such as the U.S. Department of Justice and the U.S. Securities and Exchange Commission further added complexity to GM’s post-earnings landscape.

Conclusion

In conclusion, GM’s Q4 2023 earnings report provided a deep dive into the company’s financial performance, while also shedding light on its future outlook. The outcome of the report undoubtedly has implications for investors, stakeholders, and the broader automotive industry, as GM navigates through a shifting landscape of market forces, regulatory scrutiny, and technological advancements.

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