General Motors (GM) has revised its financial projections for 2024 after exceeding Wall Street’s expectations for the second quarter of the year.
The Detroit-based automaker has upgraded its anticipated adjusted earnings for the year to a range between $13 billion and $15 billion, improving from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has increased its targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders has been slightly decreased by less than 1%, now predicted to be between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase compared to the same period last year and surpassing Wall Street’s expectations of $45 billion, according to FactSet estimates. The company also recorded earnings per share of $3.06, exceeding the analysts’ forecast of $2.71 and representing a 60% increase from 2023. Furthermore, net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has increased over 37% so far this year. Additionally, the automaker declared a cash dividend for the third quarter, contributing to the stock’s positive performance.
In a letter to shareholders, CEO Mary Barra emphasized the success of GM’s gasoline-powered trucks and SUVs. She mentioned the launch of eight new or redesigned models across various size categories in North America and noted the scaling production of the electric Chevrolet Equinox. Barra reassured shareholders of the company’s commitment to disciplined growth in electric vehicle (EV) production, despite earlier comments indicating that GM would not meet its target of producing 1 million EVs in North America by the end of 2025 due to a market slowdown. She stated that GM plans to be flexible and “build to demand,” although EV sales did experience growth in the last quarter.
Barra also announced that Cruise, GM’s autonomous vehicle division, will discontinue its Origin vehicle in favor of the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after Cruise was forced to roll back operations following an incident last October and will help reduce costs and address regulatory concerns related to the Origin’s lack of traditional design features like a steering wheel. GM incurred a $600 million charge associated with halting Origin production.
In her remarks to analysts, Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, stating that every mile traveled and simulation brings the company closer to its goals.
Moreover, GM is restructuring its joint venture in China with SAIC Motor while facing ongoing losses, posting a $104 million loss for the second quarter. Earlier in June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is a 50% decline from the previous year, according to Automotive News.