General Motors is increasing several financial projections for 2024 after significantly exceeding Wall Street forecasts in its second quarter results.
The automaker has updated its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, raising it from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has improved its targets for operating cash flow and earnings per share. However, expectations for net income attributable to shareholders have been slightly reduced, now expected to be between $10 billion and $11.4 billion, a decline of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, representing an increase of over 7% compared to the same period last year, and surpassing Wall Street expectations of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, outperforming analysts’ expectations of $2.71 and marking a 60% increase from the previous year. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these earnings announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has increased by over 37% this year. Additionally, GM declared a third-quarter cash dividend after the market closed on Monday, which positively influenced the stock price.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gasoline-powered trucks and SUVs, noting ongoing plans to introduce eight new or redesigned vehicle models in North America. Barra emphasized GM’s commitment to disciplined volume growth while scaling up production of the electric Chevrolet Equinox, expressing enthusiasm about their electric vehicles and early successes in the market.
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, citing a slowdown in the market. However, the company stated it would remain flexible and adjust production based on demand, although EV sales grew in the last quarter.
Barra also announced that Cruise, GM’s self-driving division, would abandon its Origin vehicle model, which faced operational setbacks after an incident last October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision led to a $600 million charge related to the suspension of the Origin’s production in Detroit.
During an analyst call, Barra mentioned that using the Bolt would alleviate regulatory concerns regarding the Origin’s unconventional design, which lacked a steering wheel. This shift is expected to lower costs per unit and help GM optimize its resources.
“Our vision to transform mobility using autonomous technology remains unchanged,” said Barra, emphasizing that every mile traveled and each simulation brings the company closer to its goals as Cruise continues to function as an AI-first company.
Additionally, GM is in the process of restructuring its joint venture with SAIC Motor in China as it faces ongoing losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, which is a 50% decline compared to the previous year, as reported by Automotive News.