General Motors has adjusted its financial outlook for 2024 following impressive performance exceeding Wall Street expectations during its second quarter. The automaker now anticipates adjusted earnings between $13 billion and $15 billion, an increase from the prior projection of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, although the forecast for net income attributable to shareholders has been slightly reduced by less than 1%, now expected to range from $10 billion to $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, representing a more than 7% increase year-over-year and surpassing the Wall Street estimate of $45 billion, according to FactSet. Earnings per share reached $3.06, exceeding the anticipated $2.71 and marking a 60% improvement compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion in the same quarter last year.
Following this announcement, GM’s stock surged nearly 5% in pre-market trading on Tuesday, and the year-to-date increase stands at over 37%. The company also declared a third-quarter cash dividend after the market closed on Monday, which contributed positively to stock performance.
In a letter to shareholders, CEO Mary Barra highlighted the strong demand for GM’s gasoline-powered trucks and SUVs, noting that the company is set to introduce eight new or redesigned models across various sizes in North America. Barra emphasized GM’s commitment to scaling the production of the electric Chevrolet Equinox, expressing enthusiasm about the company’s early successes in electric vehicles, while maintaining a focus on disciplined volume growth.
Earlier in the 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 market slowdown. However, she assured shareholders that the company would remain adaptable and produce vehicles based on demand, even as EV sales showed an increase in the last quarter.
Additionally, Barra announced that Cruise, GM’s autonomous vehicle division, would discontinue its Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. The company incurred a $600 million charge linked to the halted production of the Origin in Detroit. During an analyst call, Barra explained that using the Bolt would address regulatory concerns regarding the unconventional design of the Origin, like its absence of a steering wheel, while also lowering costs and optimizing resource allocation.
“Our vision to transform mobility using autonomous technology remains intact, as every mile and simulation gets us closer to our goal, since Cruise operates as an AI-first company,” stated Barra.
GM is also looking to reorganize its joint venture in China with SAIC Motor, as it continues to face financial setbacks, including a reported loss of $104 million for the second quarter. In June, production was significantly reduced by 70% at SAIC-GM, resulting in the delivery of only 26,000 vehicles, a 50% decrease compared to the previous year, according to industry reports.