The only thing that would have Henry Ford rolling in his grave more than America’s new “work from home culture” is General Motors’ latest earnings report. In short, GM's stock shot up nearly 10% after the company casually dunked on Wall Street’s expectations and raised its guidance for the year. Bigly. 

(Source: Giphy) 

Simply put, GM’s numbers speak for themselves as the company raked in $2.96 per share in adjusted earnings, well above the $2.43 analysts were expecting. Oh and revenue? It came in at a whopping $48.8 billion, blowing past the $44.6 billion target (which is a 10.5% increase YoY). 

(Source: Reuters) 

The reason for the ball crushing quarter, you ask? Well, it’s none other than Gas-guzzling trucks and SUVs. Apparently, Americans still love our giant four-wheel monstrosities of a daily driver, and GM is only too happy to oblige - as Mary Barra and co. kept inventories tight and pricing strong in order to keep profits rolling in faster than the insatiable demand of gas these vehicles consume. 

(Source: Giphy) 

But what’s really got investors buzzing is GM’s outlook. The automaker is now aiming for pre-tax profits of $14 billion to $15 billion this year, up from their previous forecast of $12 billion to $14 billion. And if we’ve learned anything about guidance, it’s that Wall Street loves raised guidance numbers about as much as they love their over inflated salaries. 

(Source: Benzinga) 

Now with that said, if you’re looking for the one part of GM’s quarter that didn’t slap, direct your attention to China. Once a powerhouse, GM’s operations in the region lost $137 million in Q3, dragging its total losses in China to $210 million this year. The company is planning a restructuring, but honestly, they haven’t even started the real work yet. 

(Source: Wards Auto) 

Additionally, GM has also had issues with their EV division. Yes, GM has been ramping up production, but EVs still made up just 4% of its U.S. deliveries through Q3. Which is not exactly “Tesla domination” out here, despite all the noise about the Silverado EV and Equinox electric SUV. But, GM says they’ll hit 200,000 EVs produced in North America by the end of the year, with investors keeping their expectations in check.

But, but, but… the good thing here is, is that GM knows where its bread is buttered. Traditional gas-powered trucks and SUVs are still the company’s profit engine. And they’re not pulling back (or getting shiny object syndrome with EV’s) anytime soon. In fact, GM has eight refreshed gas SUV models lined up through 2025. For every customer who’s not ready to jump on the EV train (read: most of them), GM’s got a shiny new gas-guzzler waiting.

(Source: MotorTrend) 

This is the very reason why CFO, Paul Jacobson, gave a big thumbs-up to GM’s financial health. Because even though interest rates have been higher than Snoop Dogg and GM’s cruise unit experiencing a $400 million loss in Q3, he brushed off concerns, saying the consumer (overall) has held up remarkably well. And if the Fed continues to cut rates going into next year? Well forget about it - GM is simply expecting even more green ahead. 

(Source: Giphy) 

In the end, despite a few bumps in the road with China, EV, and Cruise hemorrhaging cash, GM is having itself a year. With a stock surge of 47.79% year-to-date, they’ve left rivals like Ford and Stellantis in the dust. And as long as Americans keep buying trucks the size of small apartments, GM’s cruising towards a strong finish for 2024. 

So yeah, GM’s Q3 was more American than apple pie—and with those gaudy truck sales, the momentum is definitely there. Meaning, keep your eyes on GM going forward and as always, stay safe and stay frosty, friends! Until next time…

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Stocks.News holds positions in Ford as mentioned in the article.