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GM reports Q4 sales and profit beat, issues improved profit outlook but admits EV pace has slowed

General Motors (GM) recently announced impressive fourth-quarter results, exceeding both revenue and earnings expectations. The company also provided a profit guidance for 2024 that aligns with its previous forecast for 2023. This positive news comes as GM works to overcome the impact of the UAW strike and reassess its electric vehicle (EV) rollout strategy, which has encountered some challenges. Following the financial update, GM’s stock saw a significant increase of over 7% in premarket trading.

In the fourth quarter, GM reported revenue of $42.98 billion, surpassing the consensus estimate of $39.53 billion. Additionally, the company’s adjusted earnings per share came in at $1.24, higher than the expected $1.16. However, GM experienced a 53.8% drop in adjusted EBIT compared to the previous year. For the full year, GM achieved $12.4 billion in adjusted EBIT, falling within the reinstated outlook range of $11.7 billion to $12.7 billion. Looking ahead, GM expects its adjusted EBIT for 2024 to be in the range of $12 billion to $14 billion, consistent with its initial forecast for 2023.

Despite facing hurdles in its EV rollout, GM remains optimistic about the industry’s resilience and anticipates continued growth in EV sales. While the company experienced some setbacks in 2023, particularly with its aggressive EV rollout, it aims to achieve profitability in the EV segment by the second half of 2024. However, GM recently adjusted its EV production goals and did not confirm whether it still plans to reach 1 million units of EV capacity by 2025.

Although the UAW strike had minimal impact on GM’s fourth-quarter sales, the company reported a notable 14.1% increase in total sales for 2023, reaching 2.6 million vehicles. GM also saw a slight increase in its market share in the US. However, the company projected a loss in China for the first quarter of 2024. Additionally, GM faced challenges related to its Cruise AV business unit, which is under investigation following an incident involving a pedestrian and subsequent resignation of its CEO.

Overall, GM’s strong financial performance reflects its resilience and adaptability in navigating various challenges in the automotive industry.

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