Dividends and GM pushes aside recession fears with robust forecast for 2023

In the 1950’s a President of GM says as GM goes so does the US. The statement has changed but GM remains the biggest vehicle company in the US. GM remains an important company, but the given the cycles of GM the statement as GM goes so does the US is not true anymore. If you want to see how the auto companies are doing, then GM should be examined.

In an article by Paul Linert and Joseph White of Reuters, GM had a good quarter and forecast stronger than expected earnings for 2023. The company expects to maintain pre-tax margins between 8 and 10%.

GM plans to build 400,000 electric vehicles, as it depends on trucks and SUVs for sales and profits.

The company expects to cut $2 billion in costs in 2023, some of the costs will be employee but they are looking at attrition or reducing new hires. GM has 167,000 employees.

GM is the number one sales leader of trucks, in terms of sales of Chevrolet and GMC trucks, GM expects to sell about 15 million trucks up from 13.9 million.

GM expects to full year operating earnings to be $10,5 billion to $12.5 billion or between $6.00 and $7.00 a share.

On capital spending, GM expects to spend between $11 billion and $13 billion in 2023, up from $9 billion in 2022.

The average selling price of a GM vehicle was $51,000

Linking to dividend paying stocks, everyone has their favorite or bell weather stocks to see how the economy is doing or could be doing. Many of the stocks tend to be age dependent as the economy moves through various cycles. An older person may take an auto company, a younger person might take a technology company, but they end up all dependent on one another. Auto companies are big technology users, and the interdependence can be easily seen. It is good to have a favorite or bell weather companies, sometimes you will own them, sometimes you will watch how they are doing. If your bell weather companies are doing well, then it can easily mean your attitude or confidence level will be higher as you wait for the next earnings season to verify your opinion.

There are more questions than answers, till the next time – to raising questions.


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