Auto Giants Defy Mixed Earnings with Upbeat 2024 Outlook

Major automakers General Motors, BorgWarner, and Oshkosh Corp. have upwardly revised their 2024 guidance, defying the mixed earnings picture in the auto sector, with impressive year-over-year growth in adjusted earnings and sales, signaling a potential turnaround in the industry. This development has significant implications for the overall economy, job markets, and consumer spending." This description focuses on the primary topic of the article (the revised guidance of major automakers), the main entities involved (General Motors, BorgWarner, and Oshkosh Corp.), and the context of the auto sector. It also highlights the significant actions and implications of this development, which will guide the AI in creating an accurate visual representation of the article's content.

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Nitish Verma
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Auto Giants Defy Mixed Earnings with Upbeat 2024 Outlook

Auto Giants Defy Mixed Earnings with Upbeat 2024 Outlook

In a surprising turn of events, major automakers General Motors, BorgWarner, and Oshkosh Corp. have upwardly revised their 2024 guidance, defying the mixed earnings picture in the auto sector. General Motors reported an impressive 18.5% year-over-year increase in adjusted earnings, while BorgWarner expects a significant 25-40% year-over-year growth in eProduct sales. Oshkosh Corp. also anticipates a 10.7% year-over-year growth in earnings per share (EPS).

Why this matters: The upwardly revised guidance from these auto giants signals a potential turnaround in the industry, which could have a ripple effect on the overall economy. As major employers and contributors to GDP, their success can have a positive impact on job markets and consumer spending.

General Motors' first-quarter 2024 adjusted earnings of $2.62 per share surpassed the Zacks Consensus Estimate of $2.08 and increased 18.5% year-over-year. The company's revenues of $43.01 billion beat the Zacks Consensus Estimate of $41.28 billion and rose from $39.9 billion recorded in the year-ago period. GM lifted its 2024 forecasts, now expecting adjusted EBIT in the range of $12.5-14.5 billion, adjusted EPS between $9-10, and adjusted automotive free cash flow in the band of $8.5-10.5 billion.

Oshkosh Corp. also delivered strong results, with first-quarter 2024 adjusted earnings of $2.89 per share beating the consensus mark of $2.26 and rising from $1.59 per share recorded in the year-ago period. The company's consolidated net sales climbed 12.2% year-over-year to $2.54 billion, surpassing the Zacks Consensus Estimate of $2.51 billion. Oshkosh raised its 2024 guidance, now expecting consolidated sales of around $10.7 billion, adjusted operating income of approximately $1.075 billion, and adjusted EPS of $11.25.

BorgWarner, while reporting a 5.5% year-over-year decline in adjusted earnings to $1.03 per share for the first quarter of 2024, still surpassed the Zacks Consensus Estimate of 87 cents. The company's net sales of $3.6 billion, despite a 13.9% year-over-year decrease, beat the Zacks Consensus Estimate of $3.52 billion. BorgWarner raised its full-year EPS guidance, now expecting adjusted EPS within a range of $3.80-4.15, up from the earlier guided range of $3.65 to $4.00.

The upwardly revised guidance from these auto giants has instilled confidence in their prospects, making them attractive investment opportunities in the sector. General Motors' superior liquidity profile, with total automotive liquidity of $33.3 billion as of March 31, 2024, and investor-friendly moves like a 33% hike in the first-quarter dividend and share repurchases of around 13 million shares, further bolster its appeal. Similarly, Oshkosh Corp.'s balance sheet strength, with a total debt-to-capital ratio of 0.13, and BorgWarner's reaffirmed sales forecast of $14.4 billion to $14.9 billion, suggesting growth from $14.2 billion recorded in 2023, add to their allure.

As these companies navigate the dynamic landscape of the auto industry, their strong performances and optimistic outlooks set them apart. With vehicle sales expected to grow in 2024, albeit at a slower rate compared to 2023, and electric vehicle sales on the rise, General Motors, Oshkosh Corp., and BorgWarner appear well-positioned to capitalize on the opportunities that lie ahead. Their upwardly revised guidance, defying the mixed earnings picture in the sector, is a testament to their resilience and potential for growth.

Key Takeaways

  • General Motors, BorgWarner, and Oshkosh Corp. revise 2024 guidance upward, defying mixed auto sector earnings.
  • GM reports 18.5% year-over-year increase in adjusted earnings, beating estimates.
  • Oshkosh Corp. expects 10.7% year-over-year growth in earnings per share (EPS).
  • BorgWarner forecasts 25-40% year-over-year growth in eProduct sales.
  • Upwardly revised guidance signals potential turnaround in the auto industry, boosting economy and job markets.