General Motors has elevated its financial projections for 2024 after outperforming Wall Street expectations in its second quarter earnings report. The automotive giant now anticipates adjusted earnings between $13 billion and $15 billion, increasing this range from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share, while slightly reducing expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, which is a more than 7% increase compared to the previous year and surpasses the $45 billion anticipated by analysts. Earnings per share reached $3.06, exceeding the expected $2.71 and reflecting a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion a year earlier.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has surged more than 37% this year. The company’s board also declared a third-quarter cash dividend following market close on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs, noting the launch of eight new or redesigned compact, mid-size, and full-size models in North America. She emphasized that while GM is excited about its electric vehicles (EVs) and early successes, it remains committed to disciplined volume growth, particularly in scaling production of the electric Chevrolet Equinox.
Despite the positive outlook, Barra acknowledged earlier forecasts indicating 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 is adapting by planning to align production with market demand, even as EV sales have risen in the last quarter.
Barra also revealed that Cruise, GM’s self-driving unit, will discontinue its Origin vehicle, which faced operational challenges after an incident last October. Instead, Cruise will focus on deploying the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the cessation of Origin production in Detroit. Barra expressed that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design and help to reduce costs and optimize resources.
In her statement, Barra reinforced GM’s commitment to transforming mobility through autonomous technology, asserting that each mile and simulation brings the company closer to its goals. Additionally, GM is working to restructure its joint venture in China with SAIC Motor, which has been experiencing financial losses, recording a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, leading to vehicle deliveries that were 50% lower than the previous year, according to industry reports.