General Motors has adjusted its financial outlook for 2024 after exceeding Wall Street’s predictions for its second quarter results. The Detroit-based automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion, while also raising its goals for operating cash flow and earnings per share. However, expectations for net income attributed to shareholders were slightly decreased, now anticipated to be between $10 billion and $11.4 billion.
In terms of revenue, GM reported $47.9 billion for the second quarter, representing a more than 7% rise from the previous year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share came in at $3.06, exceeding analysts’ expectations of $2.71, and showing a 60% increase compared to 2023. The net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM shares jumped nearly 5% in pre-market trading, with the stock gaining over 37% in value this year. The company also declared a cash dividend for the third quarter, further boosting its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She mentioned that the company is preparing to launch eight new or redesigned vehicles in North America while scaling up production of the electric Chevrolet Equinox. Barra emphasized their commitment to controlled growth in electric vehicle production, despite earlier admitting that GM will not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to market conditions. Nonetheless, EV sales did see an increase in the last quarter.
Barra also announced a strategic pivot for Cruise, GM’s self-driving unit, which had previously suspended operations after an incident last October. The company has decided to move away from the Origin vehicle in favor of utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the halt in Origin production in Detroit.
During a conference call, Barra noted that transitioning to the Bolt would help mitigate regulatory concerns regarding the unconventional design of the Origin, which lacks a steering wheel. This change is expected to lower costs and improve resource allocation, she stated.
“Our vision to transform mobility using autonomous technology remains intact, and with every mile and simulation we undertake, we get closer to that reality,” Barra remarked.
Additionally, GM is looking to restructure its joint venture in China with SAIC Motor, following reported losses; the company suffered a $104 million loss in the second quarter. In June, SAIC-GM scaled back production by 70% and delivered 26,000 vehicles, which is a 50% decrease compared to the same time last year, as reported by Automotive News.