General Motors on Tuesday reported net income of $2.4 billion in the first quarter, down 19 percent from a year earlier after accounting for buyout payments to thousands of salaried employees and some Buick dealers.
Revenue rose 11 percent to $39.99 billion in the quarter that ended March 31. GM’s adjusted earnings before interest and taxes fell 6 percent to $3.8 billion as its North America pretax profit rose 14 percent to $3.6 billion.
GM said it was raising its full-year guidance for adjusted EBIT by $500 million, to a range of $11 billion to $13 billion. After taking a $875 million charge for employee buyouts during the first quarter, the company reduced its 2023 net income forecast to a range of $8.4 billion to $9.9 billion, from its previous outlook of $8.7 billion to $10.1 billion.
GM also reported a $99 million first-quarter charge for Buick dealers who voluntarily gave up their franchise.
After accounting for about $900 million in buyout payments to employees and $99 million for Buick dealers who voluntarily gave up their franchise, the company reduced its 2023 net income forecast to $8.4 billion to $9.9 billion, from its previous outlook of $8.7 billion to $10.1 billion.
“Once again, we delivered strong earnings thanks to healthy customer demand for our vehicles, our intense focus on operational excellence, and great teamwork between GM, our dealers, our suppliers and our unions,” GM CEO Mary Barra said in a letter to shareholders.
CFO Paul Jacobson said this month that more details about the automaker’s progress toward its goal of achieving $2 billion in cost reductions over the next two years would be shared on its first-quarter earnings call. Jacobson has said GM believes it will reach the higher end of its goal of 30 to 50 percent of its $2 billion cost target this year after about 5,000 salaried employees opted to leave the company through voluntary buyouts.
“We saw continued strong pricing, great inventory management, great demand for our products,” Jacobson said Tuesday on CNBC, adding that GM also is beginning to “get a lot of traction” toward its cost-reduction target. “We felt confident after seeing those results raising our guidance for the full year.”
GM reported $32.9 billion in revenue in North America, which it said is a first-quarter record. That was up 12 percent from the first quarter of 2022. The automaker’s U.S. light-vehicle sales grew 18 percent in the quarter, with all four brands posting increases.
This story will be updated.
