General Motors reported a significant loss for the fourth quarter amid challenging market conditions in China. Despite this setback, the company outperformed expectations for profit and revenue among analysts on Wall Street. GM is actively collaborating with the U.S. government regarding regulations and has announced substantial profit-sharing bonuses for its workforce.
The automaker previously indicated that the weak performance of its joint ventures in China would necessitate writing down assets and incurring a restructuring charge exceeding $5 billion during the fourth quarter. The Chinese automotive market has become increasingly competitive, with domestic manufacturers like BYD improving vehicle quality while lowering production costs, aided by government subsidies.
For the quarter ending December 31, GM reported a loss of $2.96 billion, equating to $1.64 per share, a stark contrast to the $2.1 billion profit or $1.59 per share recorded a year earlier. Excluding the aforementioned charges, the company earned $1.92 per share, surpassing the anticipated $1.85 per share from analysts surveyed by FactSet. Revenue increased to $47.7 billion from $42.98 billion, exceeding the Wall Street estimate of $44.98 billion.
In a letter addressed to shareholders, CEO Mary Barra highlighted that GM doubled its electric vehicle (EV) market share throughout 2024 while ramping up production. She mentioned that despite the restructuring expenses, China still contributed positively to equity income in the fourth quarter, and GM is working alongside its local partners to enhance performance.
Barra also noted that hourly workers in the United States received the highest profit-sharing payouts in the industry, amounting to over $640 million, with individual payouts reaching as much as $14,500. This bonus equates to more than two months of additional pay for employees represented by the United Auto Workers union.
Despite uncertainties surrounding trade and regulatory frameworks under the Trump administration, Barra reported that GM has been proactive in discussions with Congress and the current administration. She emphasized the significance of a robust manufacturing sector and American leadership in cutting-edge technologies.
Barra expressed her belief that the President aims to implement policies that would fortify, rather than undermine, domestic manufacturers like GM. She indicated that the automaker is prepared to manage short-term impacts of potential tariffs by optimizing its supply chain and production logistics. The company plans to be cautious with capital investments pending further clarity on future regulations.
Regardless of external challenges, Barra emphasized GM’s diverse portfolio of internal combustion engine (ICE) vehicles and electric vehicles, both of which are gaining market share. She reiterated the company’s commitment to being adaptable and executing operations efficiently.
Dan Ives from Wedbush remarked that GM had a compelling conclusion to 2024 and is witnessing considerable advantages from its investments. He views the company’s latest performance as a critical move in continuing a positive trajectory, especially as GM navigates the evolving electric vehicle landscape while balancing production and profitability.
Looking forward, GM is set to introduce three new electric vehicles under the Cadillac brand: the Escalade IQ, Optiq, and Vistiq. Additionally, Barra mentioned that the company will begin to realize the one-year effects of newly launched gas-powered SUVs in 2024, including models like the Chevrolet Equinox, Chevrolet Traverse, and GMC Acadia.
For the upcoming years, GM projects adjusted earnings for 2025 to be between $11 to $12 per share, outperforming analyst estimates of $10.86 per share. However, shares dipped by 9% on Tuesday amidst this financial report.
