General Motors Co. reported mixed quarterly results late Tuesday, missing on sales, but the stock reversed course as the auto maker doubled down on its bet on EVs, promising to launch a cheaper electric car, and said it expects record or near-record profits this year.
GM GM, +2.54% said it earned $1.7 billion, or $1.16 a share, in the fourth quarter, compared with earnings of $2.8 billion, or $1.93 a share, in the year-ago period. Adjusted for one-time items, GM earned $1.35 a share.
Sales fell to $33.6 billion from $37.5 billion a year ago.
Analysts polled by FactSet expected GM to report adjusted earnings of $1.16 a share on sales of $35.8 billion.
“We can and we will keep up our aggressive pace backed by strong results,” Chief Executive Mary Barra told investors on a call after the results.
“We expect to follow our record EBIT adjusted earnings in 2021 with another year of record or near-record results in 2022 while investing significantly more year-over-year to accelerate our growth,” she said.
For the time being, however, GM is not resuming its dividend, Barra said. GM will “consider all opportunities to return excess capital to shareholders,” but not reinstate the dividend, she said.
“Our clear priority is to accelerate our EV plan and drive growth,” she said.
Barra said that the electric Chevy Silverado pickup has more than 110,000 reservations, “and the numbers keep growing every day.” GM unveiled the highly anticipated electric Silverado last month.
After the success of the electric Equinox compact SUV, which starts at around $30,000, GM plans an even cheaper EV, with Barra saying that “affordable EVs are part of the market that startups aren’t targeting,” but are needed to accelerate EV adoption.
After falling immediately after the report was released, GM shares rebounded, and were last up about 1% in after-hours trading.
Barra also lauded GM’s Cruise division, which earlier Tuesday announced it was opening a waitlist for driverless rides in San Francisco. Cruise got an additional $1.35 billion investment from a SoftBank 9984, +1.12% tech-focused fund.
Barra said she rode in a driverless Cruise a couple of week ago and it was the “highlight” of her career as an engineer and GM executive. Cruise is hiring 500 additional people, increasing its workforce by about 20%, to advance the driverless technology and to grow.
Batteries will not be a constraint for GM’s EV push, Barra said. “We will add capacity as demand grows,” she said, and a fourth U.S. cell-plant location will be announced “shortly.”
GM stock has gained around 4% in the past 12 months, underperforming the S&P 500 index SPX, +0.69%, which has gained about 20% in the same period.