General Motors stock pops after raising full-year outlook

Shares of General Motors (GM) are trading higher after the automaker reported a beat on first-quarter revenue estimates. The company posted revenue of $43 billion, surpassing analysts' estimates of $42.2 billion, driven by recovering demand for its vehicles. General Motors also raised its full-year guidance.

Yahoo Finance's Brian Sozzi breaks down the details, providing insights into the company's future pricing strategies.

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This post was written by Angel Smith

Video transcript

BRAD SMITH: Shares of General Motors in the green this morning after a strong earnings beat in the first quarter. The company boosted its full-year guidance saying, the consumer remains resilient.

"Yahoo Finance's" executive editor Brian Sozzi joins us now. Brian, you spoke to the CFO of General Motors, Paul Jacobson, specifically, about the company's pricing strategy. What did he have to say?

BRIAN SOZZI: I just can't help but to giggle a little bit, Brad, because this quarter we saw from GM is going to look markedly different than what [INAUDIBLE] had just set up with regards to Tesla.

These are going to be totally different quarters. Tesla's quarter, not going to be good. General Motors, though, noting that their EV retail sales were up 21% in the most recent quarter in a pressure market. Nonetheless, I asked Paul Jacobson, the CFO of General Motors, about pricing for the company's products.

Now, let's keep in mind, in the auto industry, really, the past six months, we have seen promotions or discounts pick up. Here's what GM is up to.

PAUL JACOBSON: Our pricing has held up very strong across the board. We saw average transaction prices, essentially, flat. And while incentives have ticked a little bit higher, we've, actually, seen pricing improve April month-to-date so far.

So really a lot of momentum that's fueled by the great products that we're producing and the strong customer demand for them.

BRIAN SOZZI: And then in terms of EV demand, Jacobson telling me that demand continues to be strong. And they're not only selling the cars they have in the market, they remain very focused on ramping up EV production in the back half of the year related to their Ultium EV platform. Here's what Jacobson told us.

PAUL JACOBSON: This EV adoption is going to be choppy. It's going to have its ups and its downs. But we've got a lot of flexibility built into the system. Think about Spring Hill, our plant in Tennessee, where we produce EVs and ICE vehicles on the same production line.

So if we see an EV adoption trend higher, we can put more EVs onto that. If we see it take a pause, we can actually produce more ICE vehicles.

BRIAN SOZZI: So I will just tie this quarter in a bow. While you're seeing shares of GM up, they'll be big. They raised their full-year outlook. Demand for their cars are not falling off a cliff like Tesla. And, by and large, that's why the stock price is up. They're your three things.

SEANA SMITH: Let's compare it a little bit even further here to Tesla because we're going to be getting those results after the bell. A better investment story, it sounds like it's very much GM at this point compared to Tesla.

BRIAN SOZZI: Yeah. These are two wildly different stories. You have GMs earnings accelerating. No pun intended. That's actually what happened. Revenues holding up well. Pricing holding up well. I think these are things you're not going to hear on that Tesla earnings call.

What you're likely to hear on that Tesla earnings call is about robotaxis that are probably going to lose a lot of money for Tesla. We're not hearing that necessarily from GM. But I will note that driverless cruise business still remains in park. They have started manual testing again in Phoenix. That business lost $515 million on an operating basis. But, by and large, a good quarter for this company.

BRAD SMITH: It's interesting. We were running some Excel calculations on the average selling price per vehicle.

BRIAN SOZZI: Thanks for sending me that doc, Brad. Appreciate it.

BRAD SMITH: My bad. I forgot to share permissions on it. But the average selling price for this most recent quarter, $29,000, just above that. You compare that to last year, about $26,500.

So to your point, an increase year-over-year there. And then you talked about EV a moment ago. Who couldn't print this thing off? I printed it off. The trees are not going to like me.

BRIAN SOZZI: Here's some #breakingnews. For my birthday two years ago, I went out and bought a 2019 Corvette. Brad, you've seen it.

BRAD SMITH: I've seen it.

BRIAN SOZZI: We've been golfing. It was a proud moment for me. I said I was going to be buried in this car. But I don't think I will because--

BRAD SMITH: This is not yours, though.

BRIAN SOZZI: That's not my car. That is the new ZR1 that is supposed to come--

BRAD SMITH: It's the E-Ray.

BRIAN SOZZI: That is the E-Ray.

BRAD SMITH: This is the Corvette E-Ray.

BRIAN SOZZI: But they are coming out with the new Corvette ZR1 in the back half of this year. Now, this is not going to move the needle. But it is one of those halo cars that drives a lot of attention to what GM is working on. And, maybe, I trade in my 2019 Corvette and get something like.

BRAD SMITH: This guy looks like you in there.

BRIAN SOZZI: It's really not. It does look me. That does look like an aging millennial losing their hair. Yes. That is me. Thank you so much. Yes.

SEANA SMITH: We all got it.

BRIAN SOZZI: Thanks for pointing that out, Brad. I appreciate it.