GM Leads the Way in the U.S. Automotive Industry on the Rise

General Motors (stock GM) has posted record earnings in the fourth quarter of 2022 and announced a new $650 million equity stake in Lithium Americas, which will secure access to the raw material necessary to build batteries for one million electric vehicles per year.

This news has sent GM's shares soaring, as the company looks to meet increasing demand for electric vehicles.

GM's investment in Lithium Americas is a major step in the company's strategy to transition towards electric vehicles. The acquisition will provide GM with the lithium necessary to produce batteries for electric vehicles, which will help the company meet growing demand and maintain its position as a leading automaker.

The automaker reported adjusted earnings of $3 billion for the quarter, a significant increase from the previous year's earnings of $1.35 per share.

This impressive result was far better than analysts' expectations of $1.69 per share and helped GM reach full-year adjusted income of $11 billion, surpassing its previous record of $10.4 billion in 2021.

The fourth quarter earnings

General Motors (stock GM) delivered strong fourth-quarter results for 2022, easily surpassing the previous year's performance and guiding towards a strong 2023, despite the ongoing margin squeeze in the industry.

The results come as the US automotive industry is gradually normalizing after several years of record-low inventories, with GM reporting adjusted earnings per share (EPS) of $2.12 and revenue of $43.11 billion, compared to analysts' expectations of $1.69 and $40.65 billion respectively.

For the full year 2022, GM recorded revenue of $156.7 billion, with net income attributable to stockholders of $9.9 billion, and adjusted earnings before interest and tax of $14.5 billion, all of which marked the high end of the company's previously revised guidance.

However, the automaker showed signs of a margin squeeze, with net income down by less than 1% and a profit margin off 1.6 percentage points compared to the previous year.

Despite these challenges, GM guided towards adjusted earnings per share for 2023 of between $6 and $7, a decline from 2022 profit, but still higher than Wall Street projections for the period.

The automaker expects net income attributable to stockholders of between $8.7 billion and $10.1 billion, adjusted earnings before interest and taxes of $10.5 billion to $12.5 billion, and adjusted earnings per share of between $6 and $7. These results, while lower than 2022 earnings, are still above average analyst forecasts of $5.73 per share for 2023.

General Motors fourth-quarter results for 2022 and 2023 guidance demonstrate the automaker's resilience and ability to overcome industry challenges, delivering strong results and guiding towards a strong 2023.