General Motors Co. beat Wall Street expectations on Tuesday with first-quarter net income of $2.4 billion on revenue of $40 billion.
Despite a rocky economy, GM raised its guidance and is now projecting adjusted earnings before interest and taxes for the year to be between $11 billion and $13 billion, up from the previous outlook of $10.5 billion to $12.5 billion.
GM’s net income for the year is expected to be between $8.4 billion and $9.9 billion, which is down from the previous outlook of $8.7 billion to $10.1 billion since it includes a $875 million charge to cover the costs of a buyout program for 5,000 employees.
“Once again, we delivered strong earnings thanks to healthy customer demand for our vehicles, our intense focus on operational excellence, and great teamwork between GM, our dealers, our suppliers and our unions. I want to thank everyone for their efforts,” GM CEO Mary Barra wrote in a letter to shareholders.
In an interview Tuesday morning on CNBC’s Squawk Box, GM CFO Paul Jacobson called it a “great day and a great quarter for the team at GM.”
“They really executed well,” he said. “And when we look at the the results of the quarter, we saw continued strong pricing, great inventory management, great demand for our products.”
He added the company also “got a lot of traction” on its $2 billon cost-reduction program “so we felt confident, after seeing those results, raising our guidance for the full year.”
GM announced cost-cutting measures at the start of 2023 with the goal of trimming $2 billion by the end of 2024. To achieve those cost savings, GM announced an employee buyout program in March and is looking to reduce expenses by lowering complexity of the business and discretionary spending.
Net income for the quarter was down from last year’s $2.9 billion as a result of the buyout charges but GM’s revenue was up from the $36 billion the company made in the same three months last year.
GM’s adjusted earnings before interest and taxes in the first quarter were $3.8 billion, a slight drop from the $4 billion reported in the first quarter of 2022. GM’s net income margin for the quarter was 6%, down from last year’s 8.2%. Pre-tax earnings in GM North America totaled $3.6 billion in the quarter. GM International’s pre-tax earnings were about $350 million for the first quarter of this year.
The Detroit automaker in the first quarter reported a year-over-year 17.6% sales increase. With more inventory available, GM’s U.S. dealers sold 603,208 new vehicles in the first three months of 2023 up from 512,846 sold in the first quarter of 2022. For the first time, GM sold more than 20,000 electric vehicles in the United States.
Ford Motor Co. releases its first-quarter earnings on May 2. Stellantis NV releases first-quarter shipments and revenues on May 3.
khall@detroitnews.com
Twitter: @bykaleahall