Core Viewpoint - General Motors (GM) is expected to report its first-quarter 2025 results on April 29, with earnings estimated at $2.66 per share and revenues at $42.37 billion, reflecting a modest year-over-year earnings increase but a revenue decline [1][2]. Financial Performance - The earnings estimate for the upcoming quarter has increased by 2 cents, indicating a 1.5% year-over-year growth in earnings, while revenues are projected to decrease by 1.5% [2]. - For the full year 2025, GM's revenue is estimated at $179.3 billion, representing a 4.3% year-over-year contraction, while the EPS is projected to grow by approximately 6% to $11.21 [3]. Sales and Market Position - In Q1 2025, GM sold 693,363 units, marking a 17% year-over-year increase, with significant gains across key brands: Chevrolet (up 13.7%), GMC (up 17.6%), Cadillac (up 17.8%), and Buick (up 39.3%) [6]. - GM's retail sales increased by 15%, achieving its best first-quarter performance since 2018, and electric vehicle (EV) sales surged by 94% to 31,887 units, making GM the second-largest EV seller in the U.S. after Tesla [7]. Regional Performance - In China, GM delivered 442,000 vehicles, nearly flat year-over-year but down 26.3% sequentially, although new energy vehicle sales rose by 53.2% [8]. - The wholesale vehicle sales volume for GM North America is projected at 807,000 units, indicating a 1.9% year-over-year growth, with revenues expected to reach $36.46 billion [9]. Valuation and Market Comparison - Year-to-date, GM shares have declined by 12%, outperforming the auto sector and Tesla, which has seen a 36% drop [11]. - GM is trading at a forward price/sales ratio of 0.26, significantly lower than the industry average of 2.19, indicating a relatively cheap valuation [15]. Strategic Developments - GM's EV portfolio became "variable profit positive" in Q4 2024, with a production goal of 300,000 units in 2025, and the company expects to reduce EV losses by $2 billion this year [19]. - The company ended 2024 with $35.5 billion in automotive liquidity and returned $7.6 billion to shareholders, including a 25% dividend hike and a $6 billion repurchase authorization [20]. Challenges and Outlook - GM anticipates a slight decline in internal combustion engine vehicle volumes in North America and a 1-1.5% decrease in vehicle pricing, which may impact margins [21]. - Despite the challenges, GM is viewed as a solid long-term investment, although new investors may consider waiting for more clarity on tariff tensions and pricing pressures before making purchases [22].
GM Q1 Earnings Preview: Should You Buy the Stock Before the Results?