General Motors third quarter earnings came in ahead of what analysts predicted at $3.3 billion of net income but fell short on revenue of $41.9 billion. The company also said its full-year guidance would remain unchanged for 2022.
“During the third quarter, GM once again delivered strong results, including record third-quarter revenue and double-digit EBIT-adjusted margins,” GM Chair and CEO Mary Barra wrote in a letter to shareholders.
“We’re delivering on our commitments and affirming our full-year guidance despite a challenging environment because demand continues to be strong for GM products and we are actively managing the headwinds we face.”
Strong results
The nearly $1 billion in additional net income the company generated during the quarter just ended pushed its net margin to 7.9%, but the EBIT-adjusted margin jumps to 10.2% on adjusted income of $4.3 billion.
The big third quarter, which came about largely due to GM’s supply chain come through allowing the company to better meet demand for its products. It didn’t have that same luck in Q2.
The company’s results through the first nine months outpaced the same period last year for revenue, but it lagged in other areas including net income and margin as well as EBIT-adjust income and margin. GM’s year-to-date revenue is $112.6 billion compared with $93.4 billion during 2021. However, it reported net income of $7.9 billion this year versus $8.3 billion for the year-ago period.
It was also down on adjusted income going from $11.5 billion through Q3 in 2021 down to $10.7 billion in 2022. Its margins were 12.3% last year, falling to 9.4% through Sept. 30, 2022. Despite this the company elected to not make any changes to its full-year guidance, confirming:
- Full-year net income of between $9.6 billion and $11.2 billion, and EBIT-adjusted of between $13.0 billion and $15.0 billion
- Full-year EPS-diluted of between $5.76 and $6.76, and EPS-diluted-adjusted of between $6.50 and $7.50
- Full-year net automotive cash provided by operating activities guidance range of between $16.0 billion and $19.0 billion, and adjusted automotive free cash flow guidance range of between $7.0 billion and $9.0 billion
The company also noted plans to “deliver our third consecutive year of full-size pickup leadership, and our 22nd year as the full-size SUV leader. To build our truck leadership and help maintain our strong margins, Chevrolet and GMC recently unveiled new midsize and heavy-duty pickups that will launch next year.”
Investors appear pleased
“A secure and integrated supply chain will be another competitive advantage for us as we scale,” Barra noted. “As I shared last quarter, we moved early and aggressively to secure commitments for all the battery raw material we need to reach more than 1 million units of annual EV capacity in North America in 2025.
“For growth beyond 2025, we continue to secure our future with strategic supply agreements and direct investments in natural resource recovery, processing and recycling.”
In addition to an under control supply chain, one of the areas analysts and investors were watching closely with today’s release is if the auto company would need to revise its full year guidance due to the up-and-down nature of the supply chain these days.
GM did not and was rewarded with a bump in the company’s stock. After opening the day at $35.72, it rose into the mid-$37 range by midday. After a bit of a regression, it charged late in the afternoon finishing at $37.01, up 3.6% for the day.
The move provided saw investors show some enthusiasm for the rest of the industry as Ford, Rivian, Toyota and Lucid all finished up for the day with EV makers Rivan and Lucid showing 10% and 8.8% jumps for the day.