General Motors (NYSE:GM) stock rose overnight after it beat estimates, raised guidance, and paused work on the Cruise Origin robotaxi, which doesn’t have a steering wheel. However, after the markets opened, the stock tanked 2.5% and is still falling as of this writing.
GM reported net income of $2.9 billion, $3.06 per share diluted and adjusted, on revenue of almost $49 billion. It guided a full-year net income of $10 billion to $11.4 billion, earnings of $8.93 to $9.93 per share, and operating cash flows of $19.2 to $22.2 billion. The last figure was up $900 million.
GM stock opened this morning at $49.42 per share, and its market capitalization is about $58 billion.
Get Behind the Wheel
The company took a charge of $583 million in killing the robotaxi project. Instead, CEO Mary Barra said the company would focus on self-driving software efforts for the Chevy Bolt electric. She said this would “simplify their path to scale” since GM won’t be building a unique body for the vehicle.
GM still plans to offer self-driving services in Texas and Arizona next year, but there will be drivers in the cars. Cruise suspended operations last year after one of its vehicles ran over and dragged a pedestrian in San Francisco after a human driver knocked her in the way of it in a hit-and-run.
Analysts expected adjusted earnings per share of $2.75 and revenue of just $45.46 billion. North American truck sales led the way, but earnings were down in China, where GM lost $104 million. The company said it was restructuring its operations in China.
While many analysts insist electric vehicle (EV) sales are slowing, GM sold 21,930 of them last quarter, up 40% from a year ago. It expects profits on its EVs once it reaches production of 200,000 units. Barra said GM is unlikely to hit its production goal of 1 million EVs in 2025.
GM Stock: What Happens Next?
Analysts refused to raise price targets after first-quarter earnings were 23% ahead of estimates. They may revisit those price targets after today’s earnings call.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
