Written by Cláudio Afonso | LinkedIn | X
General Motors Co (GM) shares tumbled more than 10% in early Tuesday trading after the U.S. automaker reported a sharp decline in fourth-quarter net income, even as revenue and earnings per share exceeded Wall Street estimates.
GM reported net income attributable to stockholders of $6.0 billion for 2024, a drop from $10.1 billion in the prior year.
Last month, the company said it would record approximately $5.3 billion in charges in the fourth quarter of the year related to its Chinese joint venture with the SAIC Group as it plans a major restructuring process which includes “plant closures and portfolio optimization”.
An additional $2.7 billion in equity losses will be recognized as part of SGM’s restructuring plan, which includes plant closures and portfolio optimization — according to December’s SEC filing.
Return on equity (ROE) also fell to 8.7% from 14.1% a year earlier, reflecting the decline in profitability. The company’s average equity for the year stood at $68.9 billion, down from $72.0 billion in 2023.
Revenue for the fourth quarter reached $47.7 billion, surpassing analyst expectations of $43.93 billion. Earnings per share (EPS) for the period came in at $1.92, slightly beating estimates of $1.89.
GM emphasized the growth of its electric vehicle (EV) portfolio, stating that it now offers coverage across key market segments at multiple price points. The automaker claimed it is the “fastest growing high-volume EV manufacturer,” with its U.S. market share doubling in 2024.
In the fourth quarter, GM’s U.S. EV market share rose from 9.3% to 12.5%, with sales reaching 44,000 units. For the full year, the company delivered 4.01 million vehicles, generating $187.4 billion in revenue.
Looking ahead, GM’s 2025 financial guidance assumes a stable policy environment in North America and expects a $0.5 billion benefit from lower year-over-year expenses at Cruise, its autonomous vehicle unit.
However, the company cautioned that the forecast does not account for potential regulatory changes, such as tariffs on vehicle imports or tax policy shifts.
The company expects capital spending of $10 billion to $11 billion in 2025, including investments in its battery cell manufacturing joint ventures.
In November, the Detroit carmaker announced it would lay off nearly 1,000 workers worldwide, most of them in the United States. The company informed employees of its third workforce reduction since August, following layoffs of over 1,000 employees in its software department and approximately 1,700 workers in September at a manufacturing plant in Kansas.
