GM expects 2025 earnings to be similar to this year despite industry headwinds

GM expects 2025 earnings to be similar to this year despite industry headwinds


Brand new GMC trucks are displayed on the sales lot at Hanlees Hilltop GMC on July 02, 2024 in Richmond, California.

Justin Sullivan | Getty Images

DETROIT — General Motors expects its 2025 adjusted earnings to be in a “similar range” to the company’s results this year, CFO Paul Jacobson said Tuesday during the company’s investor day.

The Detroit automaker’s targeted adjusted earnings before interest and taxes this year were between $13 billion and $15 billion, or $9.50 and $10.50 per share, up from previous guidance of $12.5 billion to $14.5 billion, or $9 and $10 per share, earlier this year.

Achieving its 2024 targets as well as similar earnings next year would be quite an accomplishment. Auto industry sales and consumer spending have been slowing and many on Wall Street expect that 2025 will be a significantly more challenging year for automakers.

Jacobson declined to provide specific financial targets until the company formally releases its 2025 financial guidance early next year.

He said the earnings, which many expect to be down for most automakers, will be assisted by $2 billion to $4 billion in better earnings for electric vehicles, as well as growing sales and profits of traditional gas-powered vehicles.

Jacobson said based on current assumptions, GM will have eight vehicles in the market that, on average, will be approximately nine points higher in EBIT margin than previous comparable models.

“We expect to see the benefits grow in the coming years as the organization continues to embrace more efficient ways to engineer, produce and sell our vehicles,” Jacobson said.

He also said GM’s capital spend also is expected to be consistent in 2025 with this year. GM’s 2024 financial guidance includes anticipated capital spending of between $10.5 billion and $11.5 billion.

The EV tailwinds are split between savings from increases in volume and lower costs, including for raw materials and battery production.

GM has reduced its EV variable profit by more than 30 points year-over-year through the third quarter, Jacobson said.

GM CEO Mary Barra said Tuesday the automaker is on pace to produce and wholesale about 200,000 EVs for North America this year, achieving profitability on a production, or contribution-margin basis, by the end of this year. That guidance is down from a prior target of 200,00 to 250,000 EVs, which had been lowered from as high as 300,000 units.

Also assisting GM’s earnings next year are expected reductions to fixed costs, which have come down by $2 billion over the past two years net of depreciation and amortization, as well as relatively stable demand and incentive spend by the automaker.

Other than the financial targets for next year, the automaker provided few significant updates at its investor day.

Shares of GM closed Tuesday essentially unchanged at $46.01. The stock remains up about 28% this year, but it has been under pressure of late due to several downgrades and price target adjustments by Wall Street analysts.



Source

Harvard-trained educator: Kids who learn how to use AI will become smarter adults—if they avoid this No. 1 mistake
World

Harvard-trained educator: Kids who learn how to use AI will become smarter adults—if they avoid this No. 1 mistake

Students that copy and paste ChatGPT answers into their assignments, with little thinking involved, are doing themselves a disservice — especially because artificial intelligence really can help students become better learners, according to psychologist and author Angela Duckworth. Instead of distrusting AI, show kids how to properly use it, Duckworth advised in a speech at […]

Read More
U.S. judge prevents Trump from invalidating 5,000 Venezuelans’ legal documents
World

U.S. judge prevents Trump from invalidating 5,000 Venezuelans’ legal documents

U.S. military personnel escort alleged members of the Venezuelan gang Tren de Aragua and the MS-13 gang recently deported by the U.S. government to be imprisoned in the Terrorism Confinement Center (CECOT) prison, as part of an agreement with the Salvadoran government, in San Luis Talpa, El Salvador, in this handout image obtained March 31, […]

Read More
Saylor’s bitcoin buying strategy is ‘exploding’ globally, but Wall Street is skeptical
World

Saylor’s bitcoin buying strategy is ‘exploding’ globally, but Wall Street is skeptical

LAS VEGAS — The bitcoin treasury play that lifted Strategy’s market cap past $80 billion is now being mimicked by meme stock companies, media firms, and multinational conglomerates. But Wall Street isn’t buying all the hype. This week, Trump Media announced plans to raise $2.5 billion to buy bitcoin, and GameStop revealed a $500 million […]

Read More