On July 23, 2024, General Motors Co (GM, Financial) released its 8-K filing for the second quarter of 2024, reporting revenue of $48.0 billion and net income attributable to stockholders of $2.9 billion. The company also raised its full-year earnings guidance for the second consecutive quarter.
Company Overview
General Motors Co. emerged from the bankruptcy of General Motors Corp. (old GM) in July 2009. GM has eight brands and operates under four segments: GM North America, GM International, Cruise, and GM Financial. The United States now has four brands instead of eight under old GM. The company regained its U.S. market share leader crown in 2022, after losing it to Toyota due to the chip shortage in 2021. 2023's share was 16.5%. GM's Cruise autonomous vehicle arm has previously done driverless geofenced AV robotaxi services in San Francisco and other cities but stopped in late 2023 after an accident. It should restart in at least one city in 2024. GM owns over 80% of Cruise. GM Financial became the company's captive finance arm in October 2010 via the purchase of AmeriCredit.
Performance and Challenges
General Motors Co (GM, Financial) reported a 7.2% increase in revenue compared to the same quarter last year, reaching $48.0 billion. Net income attributable to stockholders rose by 14.3% to $2.9 billion, while EBIT-adjusted surged by 37.2% to $4.4 billion. Despite these gains, the company faces challenges, particularly in its GM International segment, which saw a significant decline in EBIT-adjusted from $236 million to $50 million, a drop of 78.8%. Additionally, the China equity income turned into a loss of $104 million from a previous income of $78 million.
Financial Achievements
General Motors Co (GM, Financial) achieved several financial milestones this quarter. The company's EBIT-adjusted margin improved to 9.3% from 7.2% last year, reflecting a 29.2% increase. Automotive operating cash flow also saw an 8.4% rise to $7.7 billion. However, adjusted automotive free cash flow slightly decreased by 3.6% to $5.3 billion.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | Change | % Change |
|---|---|---|---|---|
| Revenue | $47,969M | $44,746M | $3,223M | 7.2% |
| Net Income | $2,933M | $2,566M | $367M | 14.3% |
| EBIT-adjusted | $4,438M | $3,234M | $1,204M | 37.2% |
| EPS-diluted | $2.55 | $1.83 | $0.72 | 39.3% |
| EPS-diluted-adjusted | $3.06 | $1.91 | $1.15 | 60.2% |
Balance Sheet and Cash Flow
General Motors Co (GM, Financial) reported an automotive operating cash flow of $7.7 billion, up from $7.1 billion in the previous year. Adjusted automotive free cash flow, however, saw a slight decline to $5.3 billion from $5.5 billion. The company's updated full-year guidance now projects net income attributable to stockholders between $10.0 billion and $11.4 billion, with an EBIT-adjusted range of $13.0 billion to $15.0 billion.
Commentary
"GM's strong performance in the second quarter reflects our commitment to delivering value to our shareholders while navigating industry challenges," said Mary Barra, GM Chair and CEO.
Analysis
General Motors Co (GM, Financial) has demonstrated resilience and strategic agility in the face of industry challenges, particularly in its international operations and the autonomous vehicle segment. The company's ability to exceed revenue and earnings estimates while raising its full-year guidance underscores its robust operational performance and effective cost management strategies. However, the significant decline in international earnings and the loss in China equity income highlight areas that require strategic attention and potential restructuring.
For value investors, GM's strong financial performance and improved margins present a compelling case for long-term investment, especially given the company's strategic initiatives in electric vehicles and autonomous driving technology.
Explore the complete 8-K earnings release (here) from General Motors Co for further details.
