General Motors has increased its financial projections for 2024 following impressive second-quarter results that exceeded Wall Street expectations.
The Detroit-based automaker has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from its previous estimate of $12.5 billion to $14.5 billion. Additionally, the company has adjusted its expectations for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders has been slightly lowered 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 represents more than a 7% increase compared to the same period last year and surpasses Wall Street’s projection of $45 billion, as per FactSet estimates. Earnings per share were reported at $3.06, significantly higher than the anticipated $2.71, reflecting a 60% increase from 2023. Net income for the quarter rose by 14% to $2.9 billion, up from $2.5 billion.
Following this news, GM’s stock increased nearly 5% in pre-market trading on Tuesday, contributing to a year-to-date gain of over 37%. The company also announced a third-quarter cash dividend after market close on Monday, which further boosted its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She noted the company’s plans to launch eight new or redesigned models across various sizes in North America. Furthermore, Barra mentioned GM’s scaling efforts regarding the electric Chevrolet Equinox, stating the company is excited about their electric vehicle (EV) ventures but remains committed to disciplined growth.
Earlier this month, Barra acknowledged that GM will not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company has indicated it will adapt its production based on demand, although EV sales did see an increase in the last quarter.
On a related note, Barra announced that GM’s self-driving unit, Cruise, will discontinue its Origin vehicle following a previous operational setback and redirect its focus to using the next-generation Chevrolet Bolt for test drives in Texas and Arizona. This decision has led GM to take a $600 million charge due to the suspension of Origin vehicle production in Detroit.
In a conference call with analysts, Barra stated that transitioning to the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as the absence of a steering wheel. This move is also expected to reduce costs per unit and enhance resource optimization.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, emphasizing that every mile and simulation is a step closer to achieving this vision. Additionally, GM is working on restructuring its joint venture in China with SAIC Motor, which has resulted in financial losses; the company reported a $104 million loss for the second quarter. In June, production at SAIC-GM was cut by 70%, with only 26,000 vehicles delivered, marking a 50% decline compared to the previous year.