Of course, plenty of stocks rose in January, bouncing after a big sell-off in December. That December sell-off sent GM's share pice down 12%. But GM investors had some genuine good news to cheer in January: some strong hints that 2018 was a solid year, and surprisingly upbeat guidance for 2019.
GM gave its investors two reasons to cheer in its annual investor briefing on Jan. 11.
First, it said that while it still expects its full-year 2018 results to come in below 2017's, it now expects two key measures to come in ahead of the guidance for 2018 that it gave in October:
- Adjusted earnings per share between $5.80 and $6.20. 2018 result: $6.62.
- Adjusted automotive free cash flow of "around $4 billion." 2018 result: $5.2 billion.
In GM-speak, "adjusted" figures exclude the effects of one-time items, and "automotive" figures exclude results related to subsidiaries GM Financial and Cruise Automation.
Second, GM's 2019 guidance calls for even better results that will be driven by lower costs, because of the restructuring that GM announced in November, and higher profits driven by new products.
For the full year, GM expects:
- adjusted earnings per share between $6.50 and $7.00.
- adjusted automotive free cash flow between $4.5 billion and $6 billion.
Long story short: 2018 was better than GM had expected as recently as October, and 2019 will be even better -- possibly better than 2017.
Check out the latest GM earnings call transcript.
GM will share its full 2018 results before the bell on Wednesday, Feb 6. It may also share more detailed 2019 guidance at that time. But GM has already made clear that it did well in the fourth quarter of 2018, and it expects to continue to do well as 2019 unfolds.