DETROIT — General Motors delivered stronger-than-expected third-quarter financial results on Tuesday and announced a new $20 billion share repurchase plan, yet its stock fell roughly 7 percent in pre-market trading as the company narrowed its full-year earnings guidance amid growing cost pressures.
Net income attributable to stockholders reached $3.3 billion for the quarter, up roughly $2 billion from the $1.3 billion reported during the same period last year, CNBC reported. Revenue climbed 2.9 percent year over year to $50.0 billion, topping the $48.52 billion consensus compiled by Bloomberg. GM posted adjusted earnings per share of $3.70, beating analyst projections of $3.57, while adjusted earnings before interest and taxes rose nearly 22 percent to $4.1 billion.
GM’s North American operations continued to anchor profitability, generating $3.6 billion of the total quarterly adjusted EBIT.
Guidance tightened as costs rise
Despite surpassing quarterly estimates, GM opted to tighten its full-year profit outlook rather than raise it, Yahoo Finance reported. The automaker now expects adjusted EBIT between $14.5 billion and $15.5 billion, narrowing its previous range of $14.0 billion to $16.0 billion while keeping the midpoint unchanged at $15 billion. The range for adjusted earnings per share was narrowed to $12.75 to $13.75, keeping the prior $13.25 midpoint.
GM did lift its adjusted automotive free cash flow projection for the year to between $11.5 billion and $12.5 billion, up from a previous band of $9.5 billion to $11.5 billion. The board also authorized an open-ended, multiyear $20 billion share repurchase program following the completion of a $6 billion buyback announced in January, and declared a regular quarterly dividend of 18 cents per share.
“The new $20 billion multiyear share repurchase authorization we announced today further demonstrates our board’s commitment to creating even greater shareholder value,” GM Chief Executive Officer Mary Barra wrote in a letter to shareholders, adding that the company is striving to sustain momentum despite persistent inflationary headwinds.
EV sales drop amid commodity pressures
GM Chief Financial Officer Paul Jacobson told CNBC that the fourth quarter will decline sequentially, emphasizing that holding full-year guidance in the face of late-year inflation demonstrated strong operational execution. The company anticipates commodity inflation costs will hit about $2 billion, reaching the top of its prior expectations, fueled by logistics expenses and dynamic random-access memory chips. Warranty expenses are also projected near the upper end of a $1 billion to $1.5 billion range, while anticipated regulatory credits were reduced to roughly $500 million.
Those headwinds were partially balanced by gross tariff expenses, which GM expects will settle toward the lower boundary of its $2.5 billion to $3.5 billion estimate.
Meanwhile, GM’s electric vehicle business experienced a steep contraction. EV deliveries dropped approximately 62 percent to about 25,500 vehicles, falling to less than four percent of the company’s total U.S. volume compared with more than nine percent a year earlier, Yahoo Finance reported. Deliveries of the Chevrolet Equinox EV plunged 92.4 percent to 1,905 units, while the Blazer EV fell 84.4 percent and the Cadillac Lyriq slid 50.5 percent. Excluding electric models, GM’s overall sales volume remained essentially flat, rising 0.3 percent.
GM stated that financial charges tied to its electric vehicle pullback are substantially completed, having booked $11.2 billion in related expenses since late last year, CNBC reported. Moving forward, Jacobson indicated that vehicle pricing has stayed comparatively flat, though executives plan to evaluate consumer appetite next year to decide whether to offset stubborn inflation with larger price increases.
