2024-02-06 01:59:02 ET
Summary
- General Motors released its Q4 and full-year 2023 results, exceeding market expectations and its own guidance.
- GM's revenue for 2023 was $171.8 billion, with a net income of $10.1 billion and adjusted EBIT of $12.4 billion.
- The company's tight margins and high costs remain a challenge, but it has shown adaptability in controlling expenses compared to its competitors.
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My Thesis
First of all, I'm not 'bullish' or 'bearish' towards General Motors (GM). The company has managed to maintain itself over the years despite the intrinsic competition that affects the automotive sector with tight margins. The decline in its market share, in my opinion, appears to be irreversible, however, this decline will be slow, gradual and, at some level, stationary. Dividends have shrunk by half and the outlook for the next decade remains unpredictable. But despite everything, I explain in this article that, despite the scenario being unfavorable for GM, it manages to maintain stability and predictability of Net Profit, unlike other peers such as Ford (F).
Scenario
On January 30, General Motors released its fourth quarter and full year 2023 results to the general public. Investors were keen to understand a little more about the intrinsic dynamics of GM and the automotive sector as a whole, after a slightly more positive third quarter than the rest of the year. Various labor imbroglios and intrinsic problems in the sector plagued and penalized its share prices in a sector that is already known for being excessively competitive and with tight margins
Yes, the economy remained resilient and performed amazingly resiliently if we take into account all the monetary tightening perpetrated by the Federal Reserve to contain inflationary pressures, there was significant growth especially in GDP and in the services sector. This resilience, caused by congestion in traditional monetary policy channels as a result of previous loosening, may have altered the economy's reactive sensitivity to praxeological stimuli....
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General Motors: Beats Expectations, But The Numbers Recommend Caution