General Motors' strong 2Q24 results and forecast increase don't stop the share selloff 📊

General Motors (GM.US) achieved stronger results than expected. The company also raised its forecasts in key aspects of its financial result. In response to the report, the company's stock had risen in pre-opening trade, however during first horus of trading it lost all pre-market gains.    

General Motors reported a 7% increase in revenue, raising sales to $47.97 billion. Revenue is above forecasts by 5%. The company reported the largest growth in its Financial segment, which rose 12% year-on-year. The Automotive segment, the company's most important business segment, posted solid 7% y/y growth and beat consensus expectations by 6%. 

The company's sales grew thanks to increased demand for cars with internal combustion engines, particularly for trucks and SUVs. The company reported a 7% year-on-year increase in this segment. When the company's revenues are broken down by region, GM increased its market position in the US to 16.6%, with its market share in North America as a whole rising to 15.9%. Deterioration, however, can be seen in the Chinese market, where the company lost 2.2 p.p. share, which translated into a decline in share in the overall Asian-African market to 4.5% (from 5.9%).

It is worth noting the increase in the number of vehicles sold, which in the case of GM rose to over 1 million units (+6% y/y). Positive signals can be seen in the company's cost development, as reflected in the increase in adjusted operating profit to $4.44 billion (vs. $3.91 billion forecast by consensus), a +37% y/y increase. 

At the adjusted EPS level, the company reported $3.06, which means an increase of 60% y/y (vs. $2.71 forecast). 

Such results caused the company to raise its forecasts for the whole of 2024. It now targets adjusted operating profit around $13-15 billion (previously $12.5 - $14.5 billion), which means a 33% y/y increase for the average value. For net income attributable to shareholders, the company expects $10 - $11.4 billion (down from the earlier $10.1 - $11.5 billion), however, on an adjusted diluted EPS basis it has raised its forcasts to $9.5 - $10.5 (up from the earlier $9 - $10). 

General Motors' 2Q24 results (in $ billion excluding vehicles sold and EPS). Source: XTB Research, Bloomberg Finance L.P. 

Despite strong results, solid growth in key segments, and an increase in forecasts for the full year, the company is trading down today just after the market opened. One of the reasons for investors' disappointment may be the news of another postponement of the opening of the electric car plant to mid-2026. This is the second postponement of the opening, which was at first supposed to take place at the end of 2024. The company reasons this decision by adjusting to weaker-than-expected demand in the electric car market. 

General Motors is losing more than 5% in the first hours of trading, erasing all gains since early July. Source: xStation