GM (GM) reported third-quarter results before the bell that beat estimates, tightened its full-year profit outlook instead of raising it, but instead launched its shareholders with a new $20 billion share buyback program.
For the quarter, GM reported third-quarter revenue of $50.0 billion, up 2.9% from a year ago and above the Bloomberg consensus of $48.52 billion. GM reported adjusted EPS of $3.70 versus an estimated $3.57, with adjusted EBIT of $4.1 billion, ahead of the $4.02 billion expected and up nearly 22%.
But the big update was to the tips. For the full year, GM now expects:
Adjusted EBIT of $14.5 billion to $15.5 billion (previously $14.0 billion to $16.0 billion)
Adjusted EPS from $12.75 to $13.75 (previously $12.00 to $14.00)
Auto sector adjusted free cash flow of $11.5 billion to $12.5 billion (previously $9.5 billion to $11.5 billion)
Both ranges retain the same midpoints as before – $15 billion and $13.25 – meaning GM has cut as much of the upside as the downside.
The real increase was paid in cash. GM raised its adjusted auto free cash flow forecast to $11.5 billion from $9.5 billion to $11.5 billion.
GM’s board approved a new $20 billion multi-year authorization with no expiration date. GM also declared a quarterly dividend of $0.18 per share.
“We believe this is a proven strategy,” GM CEO Mary Barra wrote in her letter to shareholders. “The new $20 billion multi-year share repurchase authorization we announced today once again demonstrates our Board of Directors’ commitment to creating even greater shareholder value.”
Barra also said GM was working to maintain its momentum “despite growing inflationary pressures.”
This can be seen with GM’s gradually rising costs. GM now expects raw material inflation of about $2 billion (the top of its previous range of $1.5 billion to $2 billion), including logistics and memory chip (DRAM) costs. It also reduced its expected regulatory benefits to about $500 million, from $750 million. On the other hand, the gross costs of customs duties are at the low end of the range of $2.5 billion to $3.5 billion.
Earlier this month, GM reported Third-quarter U.S. vehicle sales of 670,974a drop of 5.5% compared to a year ago, following a collapse Electric vehicle sales offset gains in its pickup trucks and small SUVss.
Based on GM’s model-by-model numbers, electric vehicle sales fell about 62% to about 25,500 units, or less than 4% of GM’s U.S. volume, down from more than 9% a year ago. Excluding electric vehicles, GM Sales remained essentially stable, up 0.3%.
Sales of the Chevrolet Equinox EV plunged 92.4% to 1,905 units, the Blazer EV by 84.4%, the GMC Hummer EV by 72.9% and the Cadillac Lyriq by 50.5%.
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