General Motors has increased several financial projections for 2024 after exceeding Wall Street’s expectations for its second quarter results.
The Detroit-based automaker has revised its anticipated adjusted earnings from a range of $12.5 billion to $14.5 billion up to between $13 billion and $15 billion. Additionally, GM has raised its forecasts for operating cash flow and earnings per share, while slightly reducing its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, which is over a 7% rise from the same period last year and surpasses Wall Street’s anticipated $45 billion. The earnings per share reached $3.06, exceeding the $2.71 expected by analysts and representing a 60% increase from 2023. The company’s net income rose by 14% to $2.9 billion, compared to $2.5 billion the previous year.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has increased by over 37% year-to-date. Additionally, GM declared a cash dividend for the third quarter, providing further support to its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, while also mentioning the launch of eight new or redesigned models in North America. She emphasized GM’s commitment to boosting production of the electric Chevrolet Equinox, stating the company is excited about its electric vehicles (EVs) but remains focused on disciplined growth.
Earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. She indicated that the company will adjust production based on demand, although EV sales showed growth last quarter.
Barra also announced that Cruise, GM’s autonomous driving division, would discontinue its Origin vehicle model after a previous incident led to operational setbacks. Instead, Cruise will use the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge for halting production of the Origin in Detroit.
During a recent analyst call, Barra mentioned that utilizing the Bolt addresses regulatory concerns regarding the Origin’s unconventional design, such as its missing steering wheel. This shift is also expected to reduce costs and enhance resource optimization.
Barra reiterated GM’s objective of transforming mobility through autonomous technology, highlighting that progress continues with every mile traveled and simulation run as Cruise remains an AI-first company.
In addition, GM is working to restructure its joint venture with SAIC Motor in China as it faces ongoing financial losses, reporting a $104 million loss for the second quarter. In June, the SAIC-GM partnership cut production by 70% and delivered 26,000 vehicles, a 50% drop compared to the prior year, according to Automotive News.