General Motors Company — Q1 2024 Form 10-Q
Business context and period. The filing covers the three months ended March 31, 2024. GM designs, manufactures and sells vehicles and parts, provides automotive financing through GM Financial, and invests in EV, software and autonomous-vehicle businesses. Its reportable segments are GM North America (GMNA), GM International (GMI), Cruise and GM Financial.
Key financial results
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Total net sales and revenue | $43.0 billion | $40.0 billion |
| Operating income | $3.738 billion | $2.578 billion |
| Net income attributable to common stockholders | $2.970 billion | $2.369 billion |
| Diluted GAAP EPS | $2.56 | $1.69 |
| EBIT-adjusted | $3.871 billion | $3.803 billion |
| EPS-diluted-adjusted | $2.62 | $2.21 |
| Cash from consolidated operating activities | $3.152 billion | $3.086 billion |
- Revenue increased 7.6%, led by GMNA and GM Financial; automotive revenue rose 7.0% and GM Financial revenue rose 14.0%.
- GMNA EBIT-adjusted was $3.840 billion, with a 10.6% margin versus 10.9% a year earlier. GMI reported an adjusted loss of $10 million, versus adjusted income of $347 million. Cruise’s adjusted loss narrowed to $442 million from $561 million. GM Financial adjusted pretax earnings were $737 million, down from $771 million.
- Cash and cash equivalents were $17.635 billion and marketable debt securities were $7.845 billion at quarter-end. Automotive available liquidity was $33.3 billion; GM Financial available liquidity was $33.1 billion.
- Automotive debt was $16.327 billion and GM Financial debt was $105.910 billion. GM Financial’s average debt outstanding rose 8.7% year over year to $105.3 billion; its effective borrowing rate increased to 5.3% from 4.2%.
- Inventory was $17.533 billion, up from $16.461 billion at year-end 2023. Inventory valuation allowances totaled $2.4 billion, including $2.0 billion related to EVs.
Changes versus the prior comparable period
- Higher GMNA wholesale volumes, particularly full-size and mid-size pickups, contributed to stronger revenue and adjusted earnings. Pricing for carryover vehicles and product mix partly offset the benefit.
- Consolidated net income and GAAP EPS increased. Adjusted EBIT rose modestly, while adjusted EPS increased more substantially; the prior-year comparison included $974 million of adjustments, principally voluntary separation program costs, versus $96 million in Q1 2024 for Buick dealer strategy actions.
- GMI revenue and adjusted earnings declined. China joint ventures shifted from $83 million of equity income to a $106 million loss, amid lower production and competitive pressure.
- GM Financial revenue grew with higher portfolio yields and portfolio size, but higher funding costs and a larger loan-loss provision weighed on adjusted earnings. Provision for loan losses increased to $204 million from $131 million.
- Consolidated operating cash flow was slightly higher, while investing cash outflow increased to $3.914 billion from $2.262 billion, including higher property spending and purchases of leased vehicles.
Outlook, management commentary and risks
- For full-year 2024, GM expects net income attributable to stockholders of $10.1–$11.5 billion, EBIT-adjusted of $12.5–$14.5 billion, diluted GAAP EPS of $8.94–$9.94 and adjusted diluted EPS of $9.00–$10.00. Expected adjusted effective tax rate is 18%–20%.
- Management expects relatively strong GMNA adjusted margins, supported by its truck and SUV portfolio, improving EV margins and fixed-cost reduction, partly offset by pricing moderation and increased incentives. The outlook depends on economic resilience, supply availability and EV cost reductions.
- GM expects 2024 capital spending and investments in battery-cell manufacturing joint ventures of approximately $10.5–$11.5 billion. Management says available liquidity is sufficient for expected needs and targets an average automotive cash balance of $18.0 billion.
- Cruise paused U.S. driverless, supervised and manual operations after an October 2023 incident and related regulatory scrutiny. In April 2024, it announced a plan to resume manual driving for mapping in Phoenix. GM cannot predict when driverless or commercial operations will resume; Cruise is expected to require additional liquidity in 2024.
- GM cited pricing pressure, higher interest rates, inflation, consumer-demand trends, EV profitability, competition and China-market conditions as risks. It also identified labor disruption, supply-chain availability, regulation, foreign-exchange volatility and geopolitical uncertainty as potential challenges.
- Contingencies include up to approximately $2.1 billion of reasonably possible loss beyond accruals for indirect tax matters; GM says the possible loss range for several product-liability and airbag-related matters cannot currently be estimated. The company accrued $1.1 billion for litigation-related and tax administrative matters overall. Potential ARC airbag-related costs beyond amounts accrued could be material, but are not estimable.
- Costs expensed for greenhouse-gas and fuel-economy accounting matters totaled approximately $490 million through March 31, 2024; GM expects resolution generally consistent with its accrual. Remaining Chevrolet Bolt recall accrual was $0.5 billion. Warranty liabilities, net of supplier recoveries, were $8.726 billion, up from $7.325 billion a year earlier.
- Shareholder returns included $139 million in common dividends and $331 million of share repurchases during the quarter, in addition to shares delivered under the $10 billion accelerated repurchase agreement. Final settlement is expected by year-end 2024.
Important facts for investors to verify
- Whether full-year earnings guidance and the expected improvement in EV margins remain achievable as pricing, incentives and EV inventory costs develop.
- GMNA volume, pricing and margin trends, and whether reduced market share in the U.S. and China persists.
- GM Financial credit performance, delinquencies, loan-loss provisions, funding costs and used-vehicle residual values.
- Cruise’s regulatory investigations, operating restrictions, funding needs and timetable for any return to driverless or commercial service.
- Changes in recall, product-liability, emissions and indirect-tax exposures, including the potentially material but unquantified matters disclosed in the filing.
- Automotive liquidity and cash deployment, including planned investment, the remaining repurchase authorization and final settlement of the accelerated share repurchase.