Proactive Investors - General Motors Company (NYSE:GM) shares rose after the automaker reported first quarter financial results that exceeded estimates and raised its full year guidance.
For 2024, GM now expects profit in the range of $10.1 billion to $11.5 billion, compared to its previous guidance of $9.8 billion to $11.2 billion.
Adjusted earnings per share (EPS) is expected to be between $8.94 and $9.94, up from its earlier forecast of $8.50 to $9.50. The Wall Street consensus is $9.12.
For the first quarter, which ended on March 31, profits increased by 24.4% in the year-ago quarter to $3 billion and adjusted EPS increased by 18.6% to $2.62, ahead of estimates of $2.06.
Revenue grew 7.6% year-over-year to $43 billion.
GM shares added 4.6% to about $45 in early trade on Tuesday.
Turnaround underway
Analysts at Wedbush commented that GM’s March quarter results demonstrated that a turnaround appears underway at the company.
“GM delivered March results which came in very strong putting together another solid performance well above the Street on the top and bottom line as the company focuses heavily on profitability with expenses continuing to be a big focus,” they wrote.
“This was a major ‘prove me’ quarter for GM and shows the long-awaited turnaround now appears to be underway.”
They see the company’s “solid” guidance coming amid a “murky backdrop.”
“From a guidance perspective, GM is continuing to deliver on its initial goals while raising bottom line guidance and providing more color on the year,” they wrote.
They highlighted that, importantly, as the company hones in the EV transformation it expects to be EV variable margin in the second half of the year.
It expects at least a 60-point earnings before interest and taxes (EBIT) margin improvement and mid-single-digit EBIT EV margin in 2025, including the benefits from clean energy tax credits, they wrote.
The analysts have an ‘Outperform’ rating and a $45 price target on GM.