General Motors is raising several of its financial projections for 2024 after surpassing Wall Street predictions for its second quarter. The Detroit-based automaker has adjusted its expected adjusted earnings to between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Operating cash flow and earnings per share targets have also been raised, while the anticipated net income attributable to shareholders has been slightly reduced by less than 1% to a range of $10 billion to $11.4 billion.
In its second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year and exceeding Wall Street’s expectation of $45 billion, as per FactSet estimates. The company’s earnings per share reached $3.06, surpassing the $2.71 per share forecast by analysts and representing a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock rose nearly 5% in pre-market trading, with the stock price having increased over 37% this year. Additionally, GM declared a third-quarter cash dividend after trading closed on Monday, contributing to the stock’s rise.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She mentioned the company is launching eight new or redesigned vehicles across compact, mid-size, and full-size categories in North America. Barra also discussed the scaling of production for the electric Chevrolet Equinox, expressing excitement about the company’s EVs while emphasizing a commitment to disciplined volume growth.
Earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns. The company plans to remain flexible and adapt production to meet demand, although EV sales showed growth last quarter.
Moreover, Barra announced that GM’s self-driving unit, Cruise, would discontinue its Origin vehicle after previously pausing operations following an incident last October. The focus will shift to using the next-generation Chevrolet Bolt for vehicle testing in Texas and Arizona. GM incurred a $600 million expense related to the halt in production of the Origin.
During a call with analysts, Barra stated that using the Bolt would address regulators’ concerns regarding the unique design of the Origin, which lacked a steering wheel. This decision is expected to reduce unit costs and help GM better allocate its resources.
“Our vision to transform mobility using autonomous technology is unchanged,” Barra commented. “Every mile traveled and every simulation brings us closer because Cruise is an AI-first company.”
In addition, GM is working to restructure its joint venture with SAIC Motor in China as it continues to face losses, recording a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which represents a 50% decline compared to the previous year.