General Motors is upgrading several financial projections for 2024 following a strong second quarter that exceeded expectations set by Wall Street.
The automaker has adjusted its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. Additionally, General Motors has raised 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.
In the second quarter, GM reported revenues of $47.9 billion, marking over a 7% increase compared to the same period last year and surpassing the $45 billion estimate by analysts. Earnings per share stood at $3.06, exceeding the anticipated $2.71 and reflecting a 60% increase from the previous year. The company’s net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to an increase of over 37% for the year. Additionally, GM announced a third-quarter cash dividend, which provided an extra boost to the stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, mentioning the launch of eight new or redesigned models in North America. Barra emphasized the growth of production for the electric Chevrolet Equinox and stated that GM remains focused on disciplined growth in the electric vehicle sector. However, she acknowledged that the company will not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns while maintaining a flexible production approach.
Barra also revealed that Cruise, GM’s autonomous driving division, would be discontinuing its Origin vehicle, pivoting to utilize the next-generation Chevrolet Bolt for tests in Texas and Arizona. This decision follows a $600 million charge tied to the halted production of the Origin in Detroit. The shift to using the Bolt is expected to address regulatory concerns regarding the Origin’s unconventional design, such as the absence of a steering wheel, while also reducing costs and optimizing resources.
“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,” Barra stated.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor amid ongoing losses, having reported a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is 50% lower than the previous year.