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General Motors Co

GM: XNYS (USA)
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GM Earnings: Strong Start to 2024 Is Good Sign for Rest of the Year

GM started 2024 with good first-quarter results and raised 2024 EPS and adjusted EBIT guidance, giving us no reason to change our $84 fair value estimate. Adjusted diluted EPS of $2.62 rose 18.6% year over year (9.8% excluding buybacks) and beat the LSEG consensus of $2.15. EPS is now guided at $9.00-$10.00, up from $8.50-$9.50, as good demand expectations; cost cutting efforts; and the fact pricing didn't fall as much as planned in the quarter led to a $500 million increase on both ends of adjusted EBIT guidance to $12.5 billion-$14.5 billion. We've never believed falling prices from chip-shortage-induced high levels would mean poor 2024 results because we expected benefits from higher US volumes as the industry heals from the chip shortage. Total adjusted EBIT rose by 1.8% year over year as a $200 million pricing headwind and a $500 million mix headwind on fewer trucks and more electric vehicles was offset by a $700 million volume tailwind. GM North America's $900 million volume benefit offset $200 million in lower GM International volume. GM's ongoing $2 billion cost reduction plan for 2024 contributed $200 million and helped offset higher labor costs in the new United Auto Workers union contract.

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