General Motors (GM, Financial) was injected with a boost injection on Tuesday, with shares skyrocketing by 9% after the company surpassed earnings estimates in Q3. The automobile maker also showed impressive sales of $48.8 billion, up 10.5% from the prior year. This good performance forced GM to increase its financial expectations for the whole year for the third consecutive quarter.
This has now improved GM's 2024 guidance on cash flow and net income and pushed up its stock by more than 50% this year. This optimism has been further boosted when GM shares rose by 10.4% up to Tuesday afternoon.
During the company's earnings call, the speaker claimed a successful approach, pointing out that GM has been adopting strategies that work well across its broad offerings, including traditional IC engine vehicles and the newer EVs. Even with the EV business consistently bleeding cash, Barra noted that GM is capable of manufacturing around 200,000 EVs in North America in 2023 and posted variable cost-profitability for the first time.
Barra also touched on key issues affecting the auto industry worldwide, specifically in China, where GM and its JV partners experienced a drop in deliveries last year. However, the company's North American operation and strategic changes have made it ready to embrace global change economically.
This has attracted investors mainly through the attractive price-earning ratio demonstrated by General Motors compared to its competitors, such as Ford Motor Company. Such improvements and a rich product portfolio make GM a very sound example of a company that seems to keep moving while others are stagnating due to industry issues.
