GM Raises Profit Outlook for 2024 After Strong First-Quarter Earnings

General Motors lifted its profit outlook for the year, as the automaker leans into strong demand for gas-powered trucks and sport-utility vehicles while trimming investment in future bets such as robotaxis.

The Detroit-based car company on Tuesday reported a 24% rise in first-quarter profit, driven by solid U.S. sales of pickup trucks, the company’s biggest moneymaker. The strength in GM’s home market helped offset considerable weakness overseas, including a rare loss in China, long a profit center for the company.

Coming into the year, GM expected the strong pricing that has driven profit in recent years might wane a bit, now that dealers have more cars to sell following years of pandemic-era tight supplies. But car shoppers continue to spend, GM Chief Financial Officer Paul Jacobson said.

“Our consumer has been remarkably resilient in this period of higher interest rates,” Jacobson said during a media call. “We think, in this environment, we can continue to perform.”

GM’s big pickups, the Chevrolet Silverado and GMC Sierra, gained U.S. market share in the first quarter, while rivals Ford Motor and Stellantis’ Ram brand saw declines.

GM raised its guidance for pretax profit before nonrecurring items by $500 million, to a range of $12.5 billion to $14.5 billion.

China remains a trouble spot: GM lost $106 million for the quarter in the world’s largest car market by sales. GM and other global automakers have been losing market share for years in China, hurt by the rise of Chinese-branded electric vehicles.

GM’s earnings also were hurt by a decline in vehicle production elsewhere in Asia as well as in South America, its third-largest market.

Overall, GM’s pretax profit for the period from January to March, excluding one-time items, rose about 2% to $3.9 billion. Earnings per share of $2.62 easily surpassed analysts’ forecasts of $2.13, according to FactSet.

GM shares have rallied since late 2023 after the company initiated plans to buy back $10 billion in stock and emphasized the strength of its business of selling gas trucks and SUVs. These moves have come as early efforts to sell a new generation of EVs have fallen flat.

That focus on the core combustion-engine portfolio—which delivers nearly all of its revenue and profit—is a reversal from earlier in the decade when investors bid up the company’s shares on enthusiasm around its electric-vehicle investments.

GM doesn’t break out the financial performance of its EVs but has made clear that it is losing money on them. Jacobson said that performance will improve throughout the year as GM builds manufacturing scale, following a few years of setbacks as the company tried to launch new electric models.

A pullback in spending on GM’s driverless-car business, Cruise, helped the bottom line by more than $100 million. The automaker suspended Cruise’s commercial robotaxi operations this past year after California regulators pulled its autonomous-driving permit, saying the cars weren’t safe for public roads.

GM said this month that it has returned Cruise vehicles to public roads in Phoenix, with safety drivers at the wheel, as a step toward returning to commercial service.

Write to Mike Colias at [email protected]