General Motors (NYSE:GM) delivered impressive second-quarter results, surpassing Wall Street expectations and boosting its full-year guidance for the second time this year. The Detroit-based automaker’s robust sales of gas-powered vehicles, trucks, and electric vehicles contributed to record revenue and earnings, demonstrating strong market demand despite economic uncertainties.
Strong Financial Performance
For Q2, GM reported record revenue of $47.97 billion, a 7.2% increase from $44.75 billion a year ago, beating the Bloomberg consensus estimate of $45.51 billion. The company posted an adjusted earnings per share of $3.06, significantly higher than the expected $2.70. Adjusted earnings before interest and taxes came in at $4.438 billion, surpassing the $3.88 billion estimate.
In response to this strong performance, GM updated its full-year 2024 guidance as follows:
- EBIT adjusted: $13.0 billion to $15.0 billion (previously $12.5 billion – $14.5 billion)
- Automotive operating cash flow: $19.2 billion to $22.2 billion (previously $18.3 billion – $21.3 billion)
- Adjusted automotive free cash flow: $9.5 billion to $11.5 billion (previously $8.5 billion – $10.5 billion)
- EPS diluted-adjusted: $9.50 to $10.50 (previously $9.00 – $10.00)
Market Reaction and Challenges
Despite the positive earnings report, GM shares initially rose in premarket trading but declined after the company announced a six-month delay in opening its Michigan EV truck plant, now set for mid-2026. Analysts expressed concerns that GM might have peaked in Q2, creating uncertainty for the latter half of the year.
CEO Mary Barra expressed gratitude for the team’s efforts in her shareholder letter, stating, “This has paved the way for us to increase our guidance for full-year earnings, free cash flow, and earnings per share.” Barra highlighted that the improved guidance and share buybacks are driven by the internal combustion engine portfolio’s strong performance, generating significant free cash flow.
EV Strategy and Production Adjustments
GM reiterated its commitment to producing 200,000 to 250,000 EVs this year, slightly adjusting from the initial 200,000 to 300,000 units planned and well below the original 400,000 units target for 2024. The company cited a strategic delay in the Orion, Michigan EV truck plant’s launch to ensure disciplined volume growth and profitability.
Barra emphasized, “We are committed to disciplined volume growth, which is key to earning positive variable profits from our portfolio in the fourth quarter.”
Sales Performance and Market Leadership
GM delivered 696,086 vehicles in the US during Q2, marking a 0.6% year-over-year increase, its best since Q4 2020. The company maintained its leadership in full-size pickups and achieved record EV sales. The Chevrolet Silverado and GMC Sierra saw a 5% year-over-year increase in the first half of 2024, while mid-sized Colorado and Canyon pickups had their best first half since 2019.
EV sales surged with 21,930 units delivered in Q1, a 34% increase from the previous quarter and a 40% jump year-over-year. Despite adjustments to its original EV plans, GM aims to have 10 EV models on the market by the end of the year.
Cruise Autonomous Driving Unit
GM’s Cruise autonomous driving unit resumed testing after a pause last year due to accidents. Cruise is expanding to new cities, with supervised testing currently in Phoenix, Dallas, and Houston. All Cruise vehicles will transition to GM’s Chevrolet Bolt EV platform, addressing regulatory uncertainties and reducing per-unit costs. However, GM will incur a $600 million one-time charge for indefinitely suspending the Origin vehicle development.
Conclusion
GM’s strong Q2 earnings and raised full-year guidance underscore the company’s robust market position and effective strategy. While challenges remain, particularly in the EV sector, GM’s commitment to innovation and disciplined growth positions it well for continued success. Investors and analysts will closely watch how GM navigates the evolving automotive landscape and maintains its competitive edge.
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