GM’s ICE segment drives Q2 profit and sales above expectations, lifts FY24 guidance

Fueled by strong U.S. demand that offset continued still sluggish demand in China, General Motors (NYSE:GM) reported a 60% increase in its second quarter profit, beating Wall Street’s expectations by $0.36. Coupled with an increase to GM’s (GM) profit guidance for 2024, shares were moving higher in Tuesday’s premarket trading, up nearly 5% before the open.

“It was truly a great first half. And we have the products, discipline and strategies to drive future success,” CEO Mary Barra said in a letter to shareholders.

The company’s profits continue to be driven by demand for internal combustion engines (“ICE”) vehicles where the company has a “consistently high performing portfolio” of ICE trucks and SUVs. The success of this segment drove total sales up by more than 7% to $47.97B, beating expectations by $2.65B.

By region, GM’s (GM) market share in the U.S. increased to 16.6% from 16.4% an increase by roughly the same amount in all of North America to 15.9%. In China, however, the company’s market share declined by 220 basis points to 6.4%, decreasing the company’s total market share across Asia/Pacific, Middle East, and Africa by 140 basis points to 4.5%.

Trucks again took the bulk of global market share, rising to 31.9% from 30.2% in the same quarter last year, while crossovers fell slightly, and market share for cars was down 130 basis points to 6.8%.

Looking ahead to FY24, the company now expects to earn a profit of $9.50 to $10.50 per share, versus previous guidance of $9.00-$10.00 per share. This compares to the Street’s consensus estimate of $9.64 per share.

Adjusted automotive free cash flow guidance is also raised to a range of $9.5B to $11.5B from $8.5B to $10.5B, previously.