General Motors is increasing its financial projections for 2024 following a strong performance that exceeded Wall Street’s expectations in the second quarter.
The automaker has adjusted its predicted adjusted earnings for the year to range from $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its goals for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders was slightly reduced by less than 1%, now anticipated to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing the $45 billion forecast by analysts. Earnings per share were recorded at $3.06, exceeding the $2.71 per share expected, and demonstrating a 60% increase from 2023. Net income rose 14% to $2.9 billion compared to $2.5 billion last year.
Following this news, GM’s stock rose almost 5% in pre-market trading on Tuesday, contributing to a 37% increase in the stock’s value this year. After the market closed on Monday, GM announced a cash dividend for the third quarter, further bolstering investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the company’s successes with gas-powered trucks and SUVs and revealed plans to introduce eight new or redesigned vehicle models in North America. She also mentioned GM’s ramp-up of production for the electric Chevrolet Equinox, emphasizing a commitment to disciplined growth in its electric vehicle (EV) segment.
Despite these advancements, Barra had previously indicated that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company has committed to being adaptable and creating vehicles based on demand, although EV sales did see growth last quarter.
Barra also announced a strategic shift for Cruise, GM’s autonomous vehicle division, which will discontinue its Origin vehicle due to challenges faced after an operational setback last October. Instead, Cruise will concentrate on the next-generation Chevrolet Bolt while testing in Texas and Arizona. This change comes with a $600 million charge for the discontinued Origin production in Detroit.
During a conversation with analysts, Barra noted that utilizing the Bolt would mitigate regulatory concerns regarding the Origin’s unconventional design, which lacks traditional steering controls. This shift is expected to reduce costs per unit and enhance resource optimization.
“Our vision to transform mobility using autonomous technology remains steadfast, and each mile driven and simulation conducted brings us closer to achieving our goals, as Cruise positions itself as an AI-first company,” Barra stated.
GM is also working on restructuring its joint venture with SAIC Motor in China, which has resulted in financial losses, including a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles—50% less than the previous year, as reported.