GM’s Earnings Zoom Past Expectations—Wall Street Still Asking for a GPS!

[ad_1]

When Life Gives You Lemons, Make Electric Trucks: The GM Earnings Saga

DETROIT — In a plot twist that could only happen in the wild west of capitalism, General Motors (aka the noble steed of the American auto industry) has galloped past Wall Street’s rather timid earnings expectations for Q3, causing analysts to awkwardly revise their predictions while avoiding eye contact. As a result, the Detroit powerhouse has decided to raise its 2024 guidance, probably while tossing confetti made of cash.

Let’s take a peek into the quirky financial magic show GM put on this quarter—feast your eyes on these numbers, crafted with the precision of a magician:

• Earnings per share: $2.96 adjusted vs. the $2.43 that Wall Street was sipping in their lattes
• Revenue: $48.76 billion vs. a modest $44.59 billion that nobody was really excited about

This marks the third time this year GM has pulled this dazzling trick, pulling a rabbit out of its hat while leaving the crowd of analysts dumbfounded. Who knew North American operations were this strong?

In an enthusiastic old-school business meeting (a far cry from the Zoom call bummers), CFO Paul Jacobson donned his wizard hat, announcing a shiny new full-year adjusted earnings guidance of $14 billion to $15 billion—obviously, that extra billion just slipped through the cracks. Adjusted automotive free cash flow? Now that’s forecasted between $12.5 billion and $13.5 billion, up from the significantly lower confines of $9.5 billion to $11.5 billion. Clearly, inflation is great for margins—who would have thought?

But wait! There’s a catch. Jacobson warns that the fourth quarter might have its own idea of fun, including lower production of trucks, classic seasonality blues, and a bittersweet mix of sold-out electric models that might leave investors stranded on the revenue highway. Meanwhile, shares of GM have shot up over 8% while giggling at the thought of reaching a new 52-week high.

In an ironic twist for an auto company, GM has somehow managed to maintain a healthy pricing strategy; it’s as if everyone collectively decided to ignore the impending chaos while keeping their wallets open. The average transaction price per vehicle hovered over $49,000 for the wonder months of July through September. Jacobson mused, "The consumer has held up remarkably well for us." Perhaps they’re all just in denial.

However, not all is sunshine and rainbows—China has proven to be one big cloud of gloom, with a lovely $137 million loss. Apparently, restructuring operations takes a lot of effort and a dash of optimism: “We think we can turn it around,” Jacobson insisted, as the sound of distant echoes filled the room.

Let’s not forget Cruise, GM’s autonomous vehicle unit, which seems to be having a financial meltdown of its own—just over a billion dollars lost this year. But hey, nothing says "innovative tech giant" like losing money while trying to drive cars without a human being behind the wheel!

In the end, GM’s stock is up about 36% this year, bolstered by billions in buybacks. So, while they’re reeling from losses across the globe, they’re basking in that sweet, sweet stock growth right here at home—an undeniable farewell to logic and a toast to the unpredictability of the wild market rodeo.

In a house that sells both gas guzzlers and futuristic tacos-on-wheels, who really knows what tomorrow holds? Perhaps a merger with a coffee shop, because true innovation requires plenty of caffeine!