General Motors has elevated several financial projections for 2024 after exceeding Wall Street expectations for its second-quarter performance.
The Detroit-based automobile manufacturer adjusted its forecasted adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. The company also raised its targets for operating cash flow and earnings per share. However, it slightly reduced its projections for net income attributable to shareholders by less than 1%, now estimating between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase from the same period last year and surpassing Wall Street’s expectation of $45 billion, based on FactSet estimates. Earnings per share stood at $3.06, exceeding analysts’ expectations of $2.71 and representing a 60% increase compared to 2023. Net income increased 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 a year-to-date climb of more than 37%. Additionally, GM announced a third-quarter cash dividend after Monday’s trading closed, further boosting investor sentiment.
In a letter to shareholders, CEO Mary Barra highlighted the strength of the company’s gas-powered trucks and SUVs, while announcing plans to launch eight new or redesigned compact, mid-size, and full-size models in North America. She also mentioned that GM is ramping up production of the electric Chevrolet Equinox, emphasizing a commitment to disciplined volume growth alongside excitement for electric vehicle developments.
Earlier this month, Barra acknowledged that GM is unlikely to 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 stated its intention to remain flexible and produce according to demand, although it experienced growth in EV sales in the last quarter.
Furthermore, Barra noted that Cruise, GM’s self-driving division, will discontinue its Origin vehicle after previously scaling back operations due to an incident last October. Instead, Cruise will concentrate on testing next-generation Chevrolet Bolt vehicles in Texas and Arizona. GM incurred a $600 million charge related to ceasing production of the Origin in Detroit.
During a call with analysts, Barra explained that utilizing the Bolt would address regulators’ concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This decision is expected to reduce costs per unit and enhance resource optimization.
“Our vision to transform mobility using autonomous technology remains steadfast, and each mile traveled and every simulation moves us closer, as Cruise is an AI-first company,” Barra stated.
GM is also working to restructure its joint venture in China with SAIC Motor, as it continues to face financial losses, posting a $104 million loss in the second quarter. In June, SAIC-GM lowered production by 70%, delivering only 26,000 vehicles, which is 50% less compared to the previous year, as reported by Automotive News.