General Motors has raised its financial projections for 2024 after significantly exceeding Wall Street expectations in its second quarter results.
The Detroit-based automaker revised its expected adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly lowering its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
For the second quarter, GM reported revenue of $47.9 billion, which is a 7% increase from the same period last year and above the $45 billion anticipated by analysts. Earnings per share reached $3.06, outpacing the expected $2.71 and reflecting a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock surged nearly 5% in pre-market trading, marking an increase of over 37% this year. The company declared a cash dividend for the third quarter after market close on Monday, contributing to the stock’s rise.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of its gasoline-powered trucks and SUVs, noting that GM is launching eight new or revamped models in North America. She also mentioned the scaling up of production for the electric Chevrolet Equinox, affirming the company’s commitment to disciplined volume growth despite earlier stating that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns.
Barra also announced that Cruise, GM’s self-driving division, will abandon plans for its Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This strategic shift follows a $600 million charge for halting production of the Origin in Detroit.
During a call with analysts, Barra expressed that utilizing the Bolt addresses regulators’ concerns regarding the Origin’s unique design, such as the absence of a steering wheel. She added that this change would reduce costs per unit and help optimize resources.
Moreover, GM is working to restructure its joint venture with SAIC Motor in China, where it has been incurring losses, including a $104 million loss in the second quarter. Production cuts by SAIC-GM resulted in a 70% decrease, delivering only 26,000 vehicles, which is 50% less than the previous year, according to industry reports.