A new GMC truck is displayed on the sales floor of Hanlees Hilltop GMC on July 2, 2024 in Richmond, California.
Justin Sullivan | Getty Images
Detroit- General Motors Chief Financial Officer Paul Jacobson said in an earnings call on Tuesday that he expects adjusted earnings in 2025 to be “similar” to the company’s performance this year. Corporate Investor Day.
The Detroit automaker’s adjusted EBIT target This year Earnings per share were in a range of $13 billion to $15 billion, or $9.50 to $10.50 a share, up from guidance earlier this year of $12.5 billion to $14.5 billion, or $9 to $10 a share.
Achieving the 2024 target and similar gains next year would be quite an achievement. automotive sales Consumer spending has been slowing, and many on Wall Street expect 2025 to be a more challenging year for automakers.
Jacobson declined to provide specific financial targets until the company formally releases 2025 financial guidance early next year.
He said many expected profits to fall for most automakers, but that a $2 billion to $4 billion boost in profits from electric vehicles, along with growing sales and profits from conventional gas-powered vehicles, would help profits.
Jacobson said that under current assumptions, GM would have eight vehicles on the market with EBIT margins that would average about nine percentage points higher than previous comparable models.
“We expect to see continued earnings growth in the coming years as the organization continues to adopt more efficient ways to design, produce and sell our vehicles,” Jacobson said.
He also said that GM’s capital expenditures in 2025 are also expected to remain consistent with this year. GM’s 2024 financial guidance includes expected capital expenditures of between $10.5 billion and $11.5 billion.
The driving force for electric vehicles is divided into savings from increased production and reduced costs, including the cost of raw materials and battery production.
Jacobson said that as of the third quarter, GM’s variable profit from electric vehicles fell by more than 30 percentage points annually.
General Motors Chief Executive Mary Barra said on Tuesday that the automaker plans to produce and wholesale about 200,000 electric vehicles for North America this year and become profitable on a volume or contribution margin basis by the end of the year. The guidance is down from a previous target of 200,000 to 250,000 electric vehicles, which was as high as 300,000.
Cuts in fixed costs, which have fallen by $2 billion after depreciation and amortization over the past two years, and relatively stable demand and incentive spending from automakers are also expected to help GM’s earnings next year.
The automaker provided few major updates at its investor day other than financial targets for next year.
General Motors shares closed little changed at $46.01 on Tuesday. The stock is still up about 28% this year, but always under pressure Recently due to multiple downgrades and price target adjustments from Wall Street analysts.
