General Motors (GM) has announced its impressive fourth-quarter earnings, reporting both top and bottom line beats. The automaker's shares closed up 7.8% after the company posted its highest levels since August 2023. However, GM CEO Mary Barra acknowledged that the growth of electric vehicle (EV) sales has slowed, leading to some uncertainty in the market.

GM generated $42.98 billion in revenue for the quarter, surpassing the Bloomberg consensus estimate of $39.53 billion. Despite this positive result, the figure was slightly lower compared to the $43.1 billion GM reported in the fourth quarter of 2022. In terms of profitability, the company reported adjusted earnings per share of $1.24, exceeding the estimated $1.16 on adjusted earnings before interest and taxes (EBIT) of $1.757 billion.

For the full year, GM earned $12.4 billion in adjusted EBIT. After reinstating its full-year outlook in November, the company is now expecting adjusted EBIT of $11.7 billion to $12.7 billion for 2024, aligning with its initial forecast for 2023. GM also projected adjusted earnings per share of $8.50 to $9.50 for the year.

While the pace of EV growth has slowed, Barra remains optimistic about GM's position in the market. She expects the company to become "variable profit positive in the second half of the year" based on the current expectations for EV demand and production growth.

GM's CFO, Paul Jacobson, reiterated the company's goal for EV profitability, stating that they will not achieve low to single-digit profitability until 2025. As part of their efforts to adapt to changing market dynamics, GM has adjusted its EV rollout plans, aiming to sell at least 250,000 EVs in 2024 based on customer demand. However, the company did not provide an update on its target of having 1 million units of EV capacity by 2025.

Barra emphasized that EV growth remains GM's top priority, but the company also has the flexibility to focus on hybrid production if necessary. She expressed confidence in the resilience of the US economy, job market, and auto sales, predicting healthy industry sales of around 16 million units, with the continued growth of EVs.

Despite facing challenges such as the UAW strike and issues related to its Cruise AV business unit, GM reported strong sales for Q4. The company had built up sufficient inventory in anticipation of the strike, resulting in a 0.3% increase in sales compared to the same period last year. GM sold approximately 625,176 cars and trucks in the US during this quarter, contributing to a total of 2.6 million vehicles sold throughout 2023. GM's market share also increased by 0.3% to 16.3%.

Looking ahead, GM forecasts total US auto industry sales to reach 16 million in 2024, indicating a significant recovery post-pandemic when only 13.4 million vehicles were sold in 2022, the lowest in a decade. However, overseas operations, particularly in China, pose challenges for the company, with a projected loss for Q1.

GM's positive earnings report has helped regain confidence from investors and analysts despite recent uncertainties regarding EV growth and the incident involving its Cruise AV business unit. The company remains committed to regaining trust through its actions and commitments.

Overall, GM's strong performance in Q4 showcases its resilience and ability to adapt to market conditions. As the company navigates the evolving landscape of EVs, it aims to maintain its position as a leader in the automotive industry.