General Motors has revised its financial projections for 2024 after exceeding Wall Street expectations for the second quarter. The Detroit-based company increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, from a previous estimate of $12.5 billion to $14.5 billion. It also raised targets for operating cash flow and earnings per share, although the expectations for net income attributable to shareholders were lowered slightly to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing the $45 billion anticipated by analysts, as per FactSet estimates. Earnings per share reached $3.06, exceeding the $2.71 expected and representing a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following the report, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to a year-to-date increase of over 37%. GM also declared a cash dividend for the third quarter after the market closed on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and noted plans to launch eight new or redesigned models in North America. She mentioned the company is ramping up production of the electric Chevrolet Equinox, emphasizing a commitment to disciplined growth in electric vehicle manufacturing.
Despite earlier projections, Barra acknowledged that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company aims to be adaptable and will produce vehicles based on demand, although it did experience growth in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, will discontinue its Origin vehicle to concentrate on the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge associated with halting Origin production in Detroit.
During a discussion with analysts, Barra indicated that using the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This shift is also expected to reduce costs and enhance resource optimization for GM.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, stating that each mile and simulation brings the company closer to its vision, as Cruise continues to operate with an AI-focused approach.
In light of ongoing losses, GM is also looking to restructure its joint venture with SAIC Motor in China, reporting a loss of $104 million in the second quarter. SAIC-GM dramatically reduced production by 70% in June, delivering only 26,000 vehicles, which is 50% lower than the previous year, according to Automotive News.