TLDR
- GM stock fell about 7% pre-market to $76.65 after Q3 results, down from Mondayās $82.75 close.
- Revenue of $50.0 billion and adjusted EPS of $3.70 both beat estimates.
- GM narrowed its full-year profit ranges, and the midpoints stayed at $15 billion EBIT and $13.25 EPS.
- The board approved a new $20 billion buyback and a $0.18 quarterly dividend.
- Adjusted automotive free cash flow guidance rose to $11.5 billion to $12.5 billion.
General Motors (GM) stock fell about 7% in pre-market trading on Tuesday to $76.65. It closed Monday at $82.75, down 1.44%.
The drop followed third quarter results that beat estimates. Investors wanted a higher full-year outlook and did not get one.
Revenue came in at $50.0 billion, up 2.9% from a year ago. The Bloomberg consensus was $48.52 billion.
Adjusted EPS was $3.70 against $3.57 expected. Adjusted EBIT was $4.1 billion, up nearly 22% and above the $4.02 billion estimate.
Barronās noted that Wall Street had looked for operating profit of $4.1 billion. The stock was down 5% shortly after the report, per Barronās.
Guidance Is Tightened, Not Raised
GM narrowed its full-year adjusted EBIT range to $14.5 billion to $15.5 billion. The prior range was $14.0 billion to $16.0 billion.
Adjusted EPS guidance is now $12.75 to $13.75, from $12.00 to $14.00. The midpoints of both ranges did not change, at $15 billion and $13.25.
Free cash flow was the bright spot. GM lifted its adjusted automotive free cash flow forecast to $11.5 billion to $12.5 billion from $9.5 billion to $11.5 billion.
Costs are creeping up. GM expects commodity inflation of about $2 billion, the top of its prior $1.5 billion to $2 billion range.
That figure includes logistics and memory chip costs. Expected regulatory benefits were cut to about $500 million from as much as $750 million.
Tariff costs are tracking toward the low end of the $2.5 billion to $3.5 billion range. That offsets part of the added pressure.
Buyback and EV Sales
The board approved a new $20 billion multiyear buyback with no expiration date. GM also declared a quarterly dividend of $0.18 per share.
CEO Mary Barra called it āa proven strategyā in her letter to shareholders. She said GM is working to keep its momentum ādespite growing inflationary pressures.ā
GMās share count stood at about 877 million at the end of the second quarter. Three years ago it was closer to 1.4 billion.
Earlier this month, GM reported Q3 US sales of 670,974 vehicles, down 5.5%. EV sales fell about 62% to roughly 25.5K units.
Light-duty pickup sales rose 9.3%, with the Silverado light-duty up 13.3% to 100,221. Excluding EVs, GMās sales rose 0.3%.
Before the report, JPMorgan analyst Rajat Gupta rated GM a Buy with a $110 price target. The stock was up just 3% year to date coming into the week.
GM stock was trading at $76.65 pre-market Tuesday, compared with Mondayās close of $82.75. Ford reports earnings on Oct. 28.
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