GM (GM) posted third quarter results before the bell that topped estimates, tightened its full-year profit outlook instead of boosting it, but issued shareholders a new $20 billion share repurchase program instead.
For the quarter, GM posted Q3 revenue of $50.0 billion, up 2.9% from a year ago and above the $48.52 billion Bloomberg consensus. GM posted adjusted EPS of $3.70 vs $3.57 estimated, with adjusted EBIT coming in at $4.1 billion, ahead of the $4.02 billion expected and up nearly 22%.Â
But the big update was guidance. For the full year, GM now expects:
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Adjusted EBIT of $14.5 billion-$15.5 billion (prior $14.0 billion-$16.0 billion)
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Adjusted EPS of $12.75-$13.75 (prior $12.00-$14.00)
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Adjusted automotive free cash flow of $11.5 billion-$12.5 billion (prior $9.5 billion-$11.5 billion)
Both ranges keep the same midpoints as before — $15 billion and $13.25 — meaning GM trimmed the upside as much as the downside.
The real raise came on cash. GM lifted its adjusted automotive free cash flow forecast to $11.5 billion-$12.5 billion, from $9.5 billion-$11.5 billion.
GM’s board approved a new $20 billion multiyear authorization with no expiration date. GM also declared a quarterly dividend of $0.18 per share.
“We think this is a proven strategy,” GM CEO Mary Barra wrote in her letter to shareholders. “The new $20 billion multiyear share repurchase authorization we announced today further demonstrates our board’s commitment to creating even greater shareholder value.”
Barra also said GM is working to continue its momentum “despite growing inflationary pressures.”
This is seen with GM’s costs creeping up. GM now expects commodity inflation of about $2 billion (the top of its prior $1.5 billion-$2 billion range), including logistics and memory chip (DRAM) costs. It also cut its expected regulatory benefits to about $500 million from as much as $750 million. Offsetting that, gross tariff costs are tracking toward the low end of its $2.5 billion-$3.5 billion range.
Earlier this month, GM reported third quarter US sales of 670,974 vehicles, a drop of 5.5% compared to a year ago, as a collapse in EV sales offset gains from its pickups and small SUVs.
Based on GM’s model-by-model figures, EV sales fell about 62% to roughly 25.5K units, shrinking to under 4% of GM’s US volume from more than 9% a year ago. Excluding EVs, GM’s sales were essentially flat, up 0.3%.
Sales of the Chevrolet Equinox EV plunged 92.4% to 1,905, the Blazer EV dropped 84.4%, the GMC Hummer EV slid 72.9%, and the Cadillac Lyriq fell 50.5%.
