Investing.com -- General Motors (NYSE:GM) has unveiled a full-year profit forecast that beat Wall Street estimates, giving lift to shares in the U.S. carmaker in premarket trading on Tuesday.
Adjusted earnings per share in 2024 is seen coming in at $8.50 to $9.50, topping Bloomberg consensus estimates of $7.70.
In a letter to shareholders on Tuesday, Chief Executive Mary Barra said that the company is "well-positioned" for a year of strong financial performance, arguing that ongoing resilience in the U.S. economy and jobs market will bolster auto sales.
Barra noted that while recent demand for electric vehicles (EV) -- widely viewed as a crucial source of future growth for the automotive industry -- has slowed, "third-party forecasts" are predicting "another year" of record EV sales. The bullish outlook contrasted with that of rival Tesla (NASDAQ:TSLA), who warned last week that sales growth would be "notably lower" in 2024 than the prior year.
GM is predicting that higher market penetration of its EV offerings will power revenue growth this year, helping offset headwinds from lower car prices and intensifying competition in China.
"In our EV business, we expect our U.S. portfolio will become variable profit positive in the second half of the year based on our current expectations for EV demand and production growth, strong interest in our vehicles, lower commodity prices and other factors," Barra said.
She added that the firm will look to "relaunch" its Cruise self-driving car segment and work to regain the trust of regulators following a non-fatal accident last year that brought operations at the division to a halt. An analysis commissioned by GM found that a number of technical errors occurred in the vehicle during the incident in October, in which a Cruise robotaxi struck and dragged a pedestrian for several feet. "Significant changes" have already begun to be implemented at the business in the wake of this review, Barra said.
Meanwhile, fourth-quarter adjusted earnings per share dropped by 41.5% compared to the year-ago period to $1.24, but were still above Wall Street projections of $1.24. Net sales also dipped marginally to $42.98 billion. Elevated Cruise expenses and the impact of widespread United Auto Workers strikes late last year were partially countered by solid U.S. demand and lower fixed costs, GM said.
"[The fourth-quarter] results continue to show GM management running a tight ship," analysts at Jefferies said in a note.
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