General Motors has increased its financial projections for 2024 after surpassing Wall Street’s expectations in the second quarter. The company has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous forecast of $12.5 billion to $14.5 billion, and also adjusted targets for operating cash flow and earnings per share. However, it slightly lowered expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
The automaker reported second-quarter revenue of $47.9 billion, which represents a more than 7% increase compared to the previous year and is above the Wall Street expectation of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding the analyst forecast of $2.71 and marking a 60% increase from 2023. Net income grew by 14% to $2.9 billion, up from $2.5 billion in the same quarter last year.
Following this news, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has gained over 37% this year. Additionally, the company declared a cash dividend for the third quarter, which contributed to the stock’s positive movement.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, mentioning the launch of eight new or redesigned models in North America. She also discussed the scaling production of the electric Chevrolet Equinox, expressing commitment to disciplined growth in electric vehicle (EV) production, despite acknowledging that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. However, EV sales have increased in the last quarter.
Barra also announced that Cruise, GM’s self-driving division which had to scale back its operations following a previous incident, would move away from its Origin vehicle to focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the halt of production for the Origin model.
In a call with analysts, Barra explained that using the Bolt would address regulatory concerns regarding the Origin’s distinctive design, which lacked a steering wheel, and would help reduce costs. She reaffirmed GM’s commitment to transforming mobility through autonomous technology, emphasizing that Cruise operates as an AI-first company.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China as it faces ongoing losses, reporting a $104 million loss in the second quarter. Production was significantly cut by 70% in June, with SAIC-GM delivering just 26,000 vehicles, which is 50% less than the previous year, according to Automotive News.