AP

GM quarterly profit jumps 16% as sales rebound late in 2022

Jan 31, 2023, 4:46 AM | Updated: 8:17 am

DETROIT (AP) — Rising factory output led to strong U.S. sales at the end of last year, pushing General Motors’ fourth-quarter net income up 16% over the same period a year ago.

The Detroit automaker made $1.99 billion from October through December, or an adjusted $2.12 per share, easily beating Wall Street per-share projections for $1.69, according to a poll of industry analysts by FactSet.

Quarterly revenue rose 28% to $43.1 billion, the company said, also beating estimates for $39.96 billion.

Shares of General Motors Co. jumped more than 9% at the opening bell Tuesday.

GM made record pretax income of $14.47 billion, the high end of its guidance of $13.5 billion to $14.5 billion. About 42,000 hourly auto workers will get profit-sharing checks of roughly $12,750, up from $10,250 in 2021. The profit sharing will cost GM about $500 million.

The company also announced that it will invest $650 million in Lithium Americas to jointly develop the Thacker Pass lithium mine in Nevada. Lithium is a key element in electric vehicle batteries, and GM says Thacker Pass is the largest known source of lithium in the U.S. and the third largest in the world. GM has plans to produce 1 million EVs per year by 2025.

Paul Jacobson, GM’s chief financial officer, told reporters Tuesday that the company has no plans to cut electric vehicle prices in response to recent price cuts by Tesla and Ford.

“We feel we’re well positioned,” he said. “We’re going to continue to watch that, but our customers are saying that our vehicles are priced well based on the demand that we’re seeing.”

GM’s performance came against the backdrop of a slowing economy due to interest rate increases from the Federal Reserve. The Fed’s key rate, which affects many consumer and business loans, is now in a range of 4.25% to 4.5%, up from near zero last March.

GM, like other automakers, had trouble keeping its factories running at full output during 2022 due to shortages of computer chips and other parts, but the industry and the company started showing signs of recovery late in the year.

GM sold 2.27 million vehicles for the year in the U.S., up 2.5% over 2021. But fourth-quarter sales rose 41% to more than 623,000. By the end of the year the supply of vehicles on dealer lots had improved 14% to almost 411,000.

Experts don’t expect a return to normal vehicle supplies until sometime next year. Jacobson said GM expects to continue to get strong prices for its vehicles, but it also sees an increase in discounts and other incentives during the year.

For the full year, GM posted net earnings to shareholders of $9.93 billion, down about 1% from 2021. That beat analysts’ estimates of $9.95 billion.

GM said it expects full year net income this year in a range of $8.7 billion to $10.1 billion. The forecast for adjusted pretax income is $10.5 billion to $12.5 billion. The pretax guidance is below figures for 2022, but Jacobson said the company still has a bullish outlook for this year.

Although it’s aware of recession forecasts, Jacobson said GM still sees strong demand for its vehicles, especially newer models. GM, he said, plans to make about $2 billion in cost reductions during the next two years, in part by filling only strategically important jobs that are vacated due to attrition.

Guidance for this year is lower than last because earnings from GM’s financial unit are expected to be down as used car prices drop, interest rates go up and leasing declines, he said. Plus, the company will see about $1 billion less in pension income this year for accounting purposes, he said.

“Were going to continue to watch it,” Jacobson said. “We want to make sure that we’re cautious and prepared for going forwad as well, but we’ve got lots of new products coming during the year and the year’s gotten off to a good start on pricing.”

GM’s average U.S. vehicle sales price in the fourth quarter was $52,833 due largely to a higher mix of expensive trucks and SUVs. That’s down about $1,000 from the same period in 2021, according to Edmunds.com.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Colorado River settlement center of new Navajo Nation push...

Associated Press

Tribes say their future is at stake as they push for Congress to consider Colorado River settlement

Navajo officials are celebrating the signing of legislation outlining a proposed Colorado River settlement that would ensure water rights.

3 days ago

Arizona doctors California abortions...

Associated Press

Arizona doctors can come to California to perform abortions under new law signed by Gov. Newsom

Arizona doctors can temporarily come to California to perform abortions for their patients under a new law signed by Gov. Gavin Newsom.

4 days ago

Father convicted of first-degree murder in northern Arizona...

Associated Press

Arizona man convicted of first-degree murder in starvation death of 6-year-old son

A northern Arizona father was convicted of first-degree murder Thursday in the 2020 starvation death of his 6-year-old son.

4 days ago

Former President Donald Trump sits in a courtroom next to his lawyer Todd Blanche before the start ...

Associated Press

Trump hush money trial enters new phase after defense rests without testimony from former president

Donald Trump's hush money trial is now closer to the moment when the jury will begin deciding the former president's fate.

6 days ago

UoA student convicted of first-degree murder after killing professor...

Associated Press

Former Arizona grad student convicted of first-degree murder in 2022 shooting of professor

A former University of Arizona grad student was convicted of first-degree murder after fatally shooting a professor on campus two years ago.

6 days ago

Rudy Giuliani bankruptcy filing defamation lawsuit...

Associated Press

Ex-NYC Mayor Rudy Giuliani, Arizona’s Kelli Ward plead not guilty in fake elector case

Giuliani appeared remotely for the arraignment that was held in a Phoenix courtroom. His trial will take place in October.

7 days ago

Sponsored Articles

...

Collins Comfort Masters

Here’s how to be worry-free when your A/C goes out in the middle of summer

PHOENIX -- As Arizona approaches another hot summer, Phoenix residents are likely to spend more time indoors.

...

Condor Airlines

Condor Airlines can get you smoothly from Phoenix to Frankfurt on new A330-900neo airplane

Adventure Awaits! And there's no better way to experience the vacation of your dreams than traveling with Condor Airlines.

...

DISC Desert Institute for Spine Care

Sciatica pain is treatable but surgery may be required

Sciatica pain is one of the most common ailments a person can face, and if not taken seriously, it could become one of the most harmful.

GM quarterly profit jumps 16% as sales rebound late in 2022