Investing.com -- General Motors Co. reported third-quarter earnings that exceeded analyst estimates, driving its stock up over 7% in early Tuesday trading. The automaker's strong performance was fueled by robust revenue growth and improved profitability.
GM posted adjusted earnings per share of $2.96, surpassing the analyst consensus of $2.40 by $0.56. Revenue for the quarter reached $48.76 billion, significantly beating the expected $44.74 billion and marking a 10.5% increase YoY.
The company's EBIT-adjusted rose 15.5% YoY to $4.1 billion, with an EBIT-adjusted margin of 8.4%, up 0.3 percentage points from the same period last year. GM's North American operations continued to be a key driver, with EBIT-adjusted of $3.98 billion, up 12.9% YoY.
"GM is delivering our best vehicles ever with strong financial results," said CEO Mary Barra. "But I want to be clear that we are not mistaking progress for winning. Competition is fierce, and the regulatory environment will keep getting tougher."
In light of its strong performance, GM raised its full-year 2024 guidance. The company now expects EBIT-adjusted between $14 billion and $15 billion, up from the previous range of $13 billion to $15 billion. GM also increased its adjusted EPS forecast to $10.00-$10.50, above the analyst consensus of $9.97.
The automaker's improved outlook reflects its progress in EV profitability, rising sales, and market share growth. GM also cited improved performance in China, despite reporting an equity loss of $137 million in the region for the quarter.
GM's financial guidance includes anticipated capital spending of $10.5 billion to $11.5 billion for 2024, which encompasses investments in battery cell manufacturing joint ventures.
Reacting to the report, analysts at RBC Capital said the company's strong performance in Q3 was helped by better North America margins.
"GMI was also better but not from better China," added RBC. "Importantly, the lower end of '24 EBIT guidance was raised, which raises the mid-point. At the mid-point, would mean Q4 consensus needs to move higher. Auto FCF was also a sizable beat in Q3 and caused mgmt to raise its '24 guidance."
Wedbush maintained an Outperform rating on the stock following the earnings release, describing it as "eye-popping," coming off of its investor day, "which came in well above the Street on the top and bottom line."
"The company continues to see major benefits from its investments and traction in the field," stated the firm. "We believe this was a large step in the right direction as management continues to navigate the choppy waters and ultimately, was a long-awaited turnaround for the GM story proving testament to GM’s performance following its goals to balance production and profitability."