General Motors (GM) once again posted robust second-quarter results, further boosting its full-year profit guidance for the second time this year.
The Detroit-based automaker reported record revenue of $47.97 billion, surpassing the $45.51 billion estimated by Bloomberg consensus and marking a 7.2% increase from the same period last year. Adjusted earnings per share (EPS) came in at $3.06, beating expectations of $2.70. GM also reported adjusted earnings before interest and taxes (EBIT) of $4.44 billion, significantly above the $3.88 billion estimate.
The company's strong performance is attributed to the continued popularity of its gas-powered vehicles, trucks, and electric vehicles (EVs). "I want to begin by thanking the GM team, as well as our dealers, suppliers, and other business partners, for helping us deliver strong second-quarter and first-half results, including record revenue in both periods," said GM CEO Mary Barra.
Guidance Raised, but Challenges Persist
GM raised its full-year 2024 forecast, with adjusted EBIT now expected to range between $13.0 billion and $15.0 billion, up from the previous $12.5 billion to $14.5 billion. Automotive operating cash flow is projected to be between $19.2 billion and $22.2 billion, and adjusted automotive free cash flow is anticipated to be between $9.5 billion and $11.5 billion. EPS diluted-adjusted is now forecasted to be between $9.50 and $10.50, up from the previous $9.00 to $10.00.
Despite the positive outlook, GM shares fell in early trading after the company announced a six-month delay in the opening of its Michigan EV truck plant to mid-2026. Analysts also raised concerns about whether GM had reached its earnings peak in Q2, with uncertainties looming for the latter half of the year.
"Our business continued to perform well in the second quarter, driven by healthy vehicle sales and improved profitability," said GM CFO Paul Jacobson. "Boosting guidance and returning cash to shareholders through buybacks are key strategies we are leveraging to enhance shareholder value."
GM raised its full-year 2024 forecast, with adjusted EBIT now expected to range between $13.0 billion and $15.0 billion, up from the previous $12.5 billion to $14.5 billion. Automotive operating cash flow is projected to be between $19.2 billion and $22.2 billion, and adjusted automotive free cash flow is anticipated to be between $9.5 billion and $11.5 billion. EPS diluted-adjusted is now forecasted to be between $9.50 and $10.50, up from the previous $9.00 to $10.00.
Despite the positive outlook, GM shares fell in early trading after the company announced a six-month delay in the opening of its Michigan EV truck plant to mid-2026. Analysts also raised concerns about whether GM had reached its earnings peak in Q2, with uncertainties looming for the latter half of the year.
"Our business continued to perform well in the second quarter, driven by healthy vehicle sales and improved profitability," said GM CFO Paul Jacobson. "Boosting guidance and returning cash to shareholders through buybacks are key strategies we are leveraging to enhance shareholder value."
EV Strategy and Market Performance
In terms of its EV strategy, GM reiterated its commitment to producing 200,000 to 250,000 EVs this year, slightly lower than the initial plan of 200,000 to 300,000 units and far from the ambitious target of 400,000 EVs by 2024. The company also revealed a delay in the launch of its EV truck plant in Orion, Michigan, now set for mid-2026.
"As excited as we are about our EVs and our early success, we are committed to disciplined volume growth," said Barra. "Our goal remains to achieve positive variable profits from our EV portfolio by the fourth quarter."
Despite the setbacks, GM reported a strong quarter for vehicle sales. The company delivered 696,086 vehicles in the US, up 0.6% year-over-year, its best performance since Q4 2020. GM also maintained its position as the sales leader in full-size pickups, with Chevrolet Silverado and GMC Sierra sales up approximately 5% year-over-year in the first half of 2024.
EV sales also hit a record, with GM delivering 21,930 EVs in Q1, marking a 34% increase over the previous quarter and a 40% year-over-year jump. The company aims to have 10 EV models in the market by the end of the year.
In terms of its EV strategy, GM reiterated its commitment to producing 200,000 to 250,000 EVs this year, slightly lower than the initial plan of 200,000 to 300,000 units and far from the ambitious target of 400,000 EVs by 2024. The company also revealed a delay in the launch of its EV truck plant in Orion, Michigan, now set for mid-2026.
"As excited as we are about our EVs and our early success, we are committed to disciplined volume growth," said Barra. "Our goal remains to achieve positive variable profits from our EV portfolio by the fourth quarter."
Despite the setbacks, GM reported a strong quarter for vehicle sales. The company delivered 696,086 vehicles in the US, up 0.6% year-over-year, its best performance since Q4 2020. GM also maintained its position as the sales leader in full-size pickups, with Chevrolet Silverado and GMC Sierra sales up approximately 5% year-over-year in the first half of 2024.
EV sales also hit a record, with GM delivering 21,930 EVs in Q1, marking a 34% increase over the previous quarter and a 40% year-over-year jump. The company aims to have 10 EV models in the market by the end of the year.
Autonomous Driving and International Challenges
GM's Cruise autonomous driving unit is ramping up testing after a pause last year due to accidents. Cruise is expanding to new cities, with supervised testing currently occurring in Phoenix, Dallas, and Houston. The unit will shift all its vehicles to GM's Chevrolet Bolt EV platform, addressing regulatory uncertainties and reducing per-unit costs.
However, GM's international operations, particularly in China, continue to face challenges. The company is revamping its money-losing unit in China amid significant excess capacity and stiff competition from local brands. GM reported a loss in China and expects the remainder of the year to remain challenging.
Conclusion
General Motors delivered a strong second quarter, driven by solid sales of gas-powered vehicles, trucks, and EVs. The company raised its full-year guidance for the second time this year, highlighting its robust financial performance. However, delays in its EV plant opening and challenges in the Chinese market pose uncertainties for the future. Investors remain cautiously optimistic, recognizing GM's strategic efforts to enhance profitability and shareholder value while navigating the evolving automotive landscape.
General Motors delivered a strong second quarter, driven by solid sales of gas-powered vehicles, trucks, and EVs. The company raised its full-year guidance for the second time this year, highlighting its robust financial performance. However, delays in its EV plant opening and challenges in the Chinese market pose uncertainties for the future. Investors remain cautiously optimistic, recognizing GM's strategic efforts to enhance profitability and shareholder value while navigating the evolving automotive landscape.
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