General Motors is increasing its financial projections for 2024 after exceeding Wall Street’s expectations in the second quarter. The Detroit-based automaker has adjusted its forecast for adjusted earnings to a range of $13 billion to $15 billion, up from a previous range of $12.5 billion to $14.5 billion. Additionally, GM raised targets for operating cash flow and earnings per share, although net income expectations for shareholders were slightly lowered to between $10 billion and $11.4 billion.
In terms of revenue, GM reported $47.9 billion for the second quarter, marking a more than 7% increase from the previous year and surpassing the $45 billion projected by analysts. The company’s earnings per share were $3.06, exceeding the $2.71 forecast and reflecting a 60% increase from 2023. Net income rose 14% to $2.9 billion, compared to $2.5 billion in the same period last year.
Following this news, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to an overall increase of over 37% this year. The company also declared a third-quarter cash dividend after market close on Monday, which helped boost the stock further.
In her letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, along with the company’s plans to launch eight new or redesigned models in North America. She emphasized the ramp-up in production of the electric Chevrolet Equinox while acknowledging that GM may not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. Despite this, EV sales did rise in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle program, focusing instead on the next-generation Chevrolet Bolt for testing in Texas and Arizona. The company incurred a $600 million charge related to the suspension of Origin production in Detroit. During an analyst call, Barra mentioned that using the Bolt would address regulatory concerns regarding the Origin’s unique design, which lacks a steering wheel, and would also reduce costs.
GM is also restructuring its joint venture with SAIC Motor in China, as it faces ongoing losses, including a $104 million loss in the second quarter. In June, SAIC-GM cut production by 70%, resulting in the delivery of 26,000 vehicles, which is 50% fewer than the same period last year.