WionDrive News Desk 
US automaker General Motors raised its annual forecast after its quarterly results topped Wall Street targets and the automaker witnessed stable pricing and demand for gasoline-engine vehicles, leading to its shares rising 4.4%. The Michigan-based company boosted its adjusted pre-tax profit projection for the year to USD 12.5 billion to USD 14.5 billion, from its previous range of USD 12 billion to USD 14 billion.
GM Chief Financial Officer Paul Jacobson told Reuters that strong consumer demand held up well in the first quarter and pricing was stable in April, but GM still plans for pricing to decline 2% to 2-1/2% for the rest of the year. “Our consumer has been remarkably resilient in this period of higher interest rates,” he added.
Even though the company is struggling in China and with EVs, it’s stronger than expected vehicle pricing with gasoline-powered trucks pleased investors. “There… is the reality that the pricing is staying stronger for longer than anybody anticipated,” said Tim Piechowski, portfolio manager at ACR Alpine Capital Research in St. Louis, which owns GM shares. “The engine of the company is truck and SUV at this point,” he added. “They’re just generating substantial profit and free cash flow that will continue to fund the initiatives in EV. Full steam ahead.”
However, some analysts have been more cautious in their outlook, pointing out that GM could lose additional market share in the near and intermediate term due to its lack of hybrid gasoline-electric vehicles. They believe that cash flow will be hampered by heavy planned spending on electric vehicles, CFRA Research analyst Garrett Nelson said in a research note.
The automaker reported that net income in the first quarter rose 24.4% over the year-ago period to USD 3 billion, on a 7.6% rise in revenue to USD 43 billion. Its adjusted earnings per share of USD 2.62 beat the average Wall Street target of USD 2.15, according to LSEG data. Revenue topped the Wall Street target of USD 41.9 billion in the March quarter.
Though GM has started 2024 on a strong note, CEO Mary Barra still has two big challenges ahead. One is turning around GM’s shrinking sales in China, and the other is salvaging Cruise, its robotaxi unit.
