General Motors has revised its financial projections for 2024 following a strong second quarter performance that exceeded Wall Street’s expectations.
The Detroit-based automaker has increased its forecast for adjusted earnings to between $13 billion and $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, it has raised its operating cash flow and earnings per share targets, though expectations for net income attributable to shareholders were reduced slightly to a range of $10 billion to $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, marking a rise of over 7% from the same period last year, and surpassing analysts’ expectations of $45 billion according to FactSet estimates. The company also posted earnings per share of $3.06, exceeding the anticipated $2.71, and a 60% increase compared to the prior year. Net income reached $2.9 billion, up 14% from $2.5 billion in the previous year.
As a result of these positive financial outcomes, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to a more than 37% increase in stock value this year. Following the market close on Monday, GM also announced a cash dividend for the third quarter, further supporting its stock performance.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, noting the launch of eight new or redesigned models across various sizes in North America. She also emphasized the scaling production of the electric Chevrolet Equinox, expressing the company’s commitment to disciplined volume growth despite earlier announcements indicating that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns.
In terms of its autonomous vehicle division, Cruise, Barra revealed that the company will discontinue its Origin vehicle in favor of utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This change follows a previous operational setback for Cruise last October and is expected to assuage regulatory concerns about Origin’s unique design, which lacks a steering wheel. The shift is also anticipated to reduce costs and optimize resources.
Barra reassured stakeholders that GM’s commitment to using autonomous technology for transforming mobility remains strong, stating that every milestone and simulation brings the company closer to its goals.
Furthermore, GM is working to restructure its joint venture in China with SAIC Motor, as it continues to face losses, including a $104 million loss in the second quarter. Earlier in June, SAIC-GM had to cut production by 70% and delivered 26,000 vehicles, representing a 50% decline compared to the previous year.