GM smashes expectations and guides toward a strong 2023, despite margin squeeze

DETROIT — General Motors solidly beat Wall Street’s top- and bottom-line expectations for the fourth quarter, while forecasting another strong year of results in 2023.

The strong report suggests GM is hanging onto record revenue even as the U.S. automotive industry begins to normalize after several years of record-low inventories and resilient consumer demand.

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Shares of GM were up roughly 5% in premarket trading Tuesday.

Here’s how GM performed to close out last year, compared with analysts’ estimates as compiled by Refinitiv:

• Adjusted earnings per share: $2.12 vs. $1.69 expected
• Revenue: $43.11 billion vs. $40.65 billion expected

The fourth-quarter results easily topped a year earlier, when the automaker reported an adjusted EPS of $1.35 and revenue of $33.58 billion for the final three months of 2021.

GM’s full-year 2022 revenue came in at $156.7 billion, with net income attributable to stockholders of $9.9 billion and adjusted earnings before interest and tax at a record $14.5 billion. Those results marked the high-end of the company’s previously revised guidance.

Still, the automaker is showing signs of a margin squeeze. GM’s net income slipped last year, down by less than 1% from the full year 2021 to $9.9 billion, with a profit margin that was off 1.6 percentage points to 6.3%. Its adjusted profit margin was 9.2%, down 2.1 percentage points compared with the previous year.

GM said it incurred special charges in the fourth quarter of $511 million related to a buyout program for its Buick dealers and $657 million related to shuttering its limited operation in Russia.

For 2023, GM expects net income attributable to stockholders of between $8.7 billion and $10.1 billion. It expects adjusted earnings before interest and taxes of $10.5 billion to $12.5 billion and adjusted earnings per share of between $6 and $7.

Those results would be below 2022 earnings, but above average…