General Motors has announced an increase in several financial projections for 2024 following a strong second quarter performance that exceeded Wall Street’s expectations. The automaker has revised 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. Additionally, GM has adjusted its targets for operating cash flow and earnings per share, while slightly lowering the expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a reduction of less than 1%.
In the second quarter, GM reported revenues of $47.9 billion, marking a more than 7% year-over-year increase and surpassing the Wall Street estimate of $45 billion, according to FactSet. The company’s earnings per share stood at $3.06, which is higher than the anticipated $2.71 per share and reflects a 60% increase from last year. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Following this positive news, GM’s stock rose nearly 5% in pre-market trading on Tuesday, and the share price has seen more than a 37% increase throughout the year. After markets closed on Monday, GM also announced a dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, while noting the company’s commitment to launching eight new or redesigned vehicle models across various sizes in North America. Barra also mentioned the scaling up of production for the electric Chevrolet Equinox and stressed the importance of “disciplined volume growth” in the electric vehicle sector.
However, Barra acknowledged that GM would likely miss its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a recent market slowdown. The company plans to remain adaptable and produce according to demand, although its electric vehicle sales saw an increase in the last quarter.
In relation to GM’s autonomous vehicle unit, Cruise, Barra announced a strategic shift away from its Origin vehicle, which had experienced operational setbacks following an incident last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt as it continues testing in Texas and Arizona. GM incurred a $600 million charge related to the suspension of Origin production in Detroit.
During an analyst call, Barra indicated that the decision to pivot to the Bolt would address regulatory concerns linked to the Origin’s unconventional design, such as the absence of a steering wheel. This change is expected to reduce costs per unit and allow GM to better allocate its resources.
Barra reiterated GM’s commitment to advancing autonomous technology, stating, “Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company.”
Furthermore, GM is working on restructuring its joint venture in China with SAIC Motor, as it faces ongoing losses, including a $104 million deficit in the second quarter. Reports indicated that in June, SAIC-GM had cut production by 70%, delivering only 26,000 vehicles, which is 50% fewer than the same month the previous year.