GM smashes expectations and guides toward a strong 2023, despite margin squeeze


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DETROIT — General Motors handily beat Wall Street’s top- and bottom-line expectations for the fourth quarter, while forecasting another solid year of results in 2023.

The strong report suggests GM is hanging onto record, or near-record, results even as the U.S. automotive industry begins to normalize after several years of record-low inventories and resilient consumer demand.

Shares of GM were up roughly 5% in premarket trading Tuesday.

Here’s how GM performed to close out last year, compared with analysts’ estimates as compiled by Refinitiv:

  • Adjusted earnings per share: $2.12 vs. $1.69 expected
  • Revenue: $43.11 billion vs. $40.65 billion expected

The fourth-quarter results easily topped a year earlier, when the automaker reported an adjusted EPS of $1.35 and revenue of $33.58 billion for the final three months of 2021.

GM’s full-year 2022 revenue came in at $156.7 billion, with net income attributable to stockholders of $9.9 billion and adjusted earnings before interest and tax at a record $14.5 billion. Those results marked the high-end of the company’s previously revised guidance.

Mary Barra, CEO, GM at the NYSE, November 17, 2022.
Source: NYSE

Still, the automaker is showing signs of a margin squeeze. GM’s net income slipped last year, down by less than 1% from full-year 2021 to $9.9 billion, with a profit margin that was off 1.6 percentage points to 6.3%. Its adjusted profit margin was 9.2%, down 2.1 percentage points compared with the previous year.

GM said it incurred special charges in the fourth quarter of $511 million related to a buyout program for its Buick dealers and $657 million related to shuttering its limited operation in Russia.

2023 guidance

For 2023, GM expects net income attributable to stockholders of between $8.7 billion and $10.1 billion. It expects adjusted earnings before interest and taxes of $10.5 billion to $12.5 billion and adjusted earnings per share of between $6 and $7.

Those results would be below 2022 earnings, but above average analyst forecasts compiled by Refinitv that called for EPS of $5.73 this year.

A five-day performance of GM’s stock.

GM forecast 2023 net automotive cash from operating activities to come in between $16 billion and $20 billion and sees automotive free cash flow of $5 billion to $7 billion.

Wall Street has been bracing for a “demand destruction” scenario for the last several quarters, with some analysts suggesting automakers may need to execute cost-cutting measures to offset recessionary spending shifts.

Demand and pricing for GM’s vehicles “remain strong,” CFO Paul Jacobson told reporters Tuesday morning. He said GM is being “appropriately cautious” but vehicle inventories remain constrained amid strong demand.

“We think the underlying business is going to be pretty consistent with what we saw last year, and I think that’s a slightly more bullish statement than where most of the market is,” he said.

GM will execute a $2 billion cost-cutting plan through the next two years, according to Jacobson. Up to half of those savings are expected this year, he said. GM expects some head count reduction due to attrition but the company is “not planning layoffs,” Jacobson said.


GM CEO Mary Barra, in a letter to shareholders, described 2023 as a “breakout year” for the company’s electric vehicle business, highlighting the introduction of more mainstream products like the Chevrolet Equinox EV as well as increases in production of its current models.

Barra confirmed GM’s revised plans to produce 400,000 EVs in North America between 2022 and the first half of next year.

GM also announced Tuesday an equity investment of $650 million in Lithium Americas Corp. to develop a lithium mine in Nevada known as Thacker Pass. GM is to receive exclusive access to phase one of production, the automaker announced.

Shares of Lithium Americas were up roughly 8% in premarket trading Tuesday.

GM said Monday it launched production of the GMC Hummer SUV EV at a plant in Detroit. That vehicle is expected to be followed by an electric Chevrolet Silverado work truck by midyear and electric versions of the Chevrolet Blazer and Equinox during the second half of 2023.

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