General Motors has revised its financial projections for 2024 following a strong performance in the second quarter that exceeded Wall Street’s expectations. The automaker now anticipates adjusted earnings for the year to be between $13 billion and $15 billion, a revision from the previous range of $12.5 billion to $14.5 billion. Additionally, it has increased its targets for operating cash flow and earnings per share, though net income attributed to shareholders was slightly decreased by less than 1%, estimated to fall between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, a rise of over 7% compared to the same period last year, surpassing Wall Street’s expectations of $45 billion, as per FactSet. The earnings per share stood at $3.06, exceeding analysts’ predictions of $2.71 and marking a 60% increase from 2023. The company’s net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
As a result of the positive financial outlook, GM’s stock saw an increase of nearly 5% in pre-market trading on Tuesday, with year-to-date growth of more than 37%. After the close of trading on Monday, GM also declared a cash dividend for the third quarter, further encouraging investor confidence.
In a shareholder letter, CEO Mary Barra highlighted the success of its traditional gas-powered trucks and SUVs, while also announcing plans to introduce eight new or redesigned models across compact, mid-size, and full-size categories in North America. Barra expressed excitement over the ramp-up of production for the electric Chevrolet Equinox, emphasizing a commitment to careful and measured growth in electric vehicle (EV) production.
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 slowdown in the market but mentioned that EV sales did increase in the last quarter.
Additionally, Barra stated that GM’s self-driving division, Cruise, would discontinue its Origin vehicle following a reduction in operations after an incident last fall. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for vehicle testing in Texas and Arizona. This shift led GM to incur a $600 million charge due to the production halt of the Origin in Detroit.
During an analyst call, Barra noted that using the Bolt would mitigate any regulatory concerns associated with the Origin’s unconventional design, including its absence of a steering wheel. This change is expected to lower costs per unit and facilitate better resource allocation for GM.
Despite challenges, GM remains focused on transforming mobility through autonomous technology, with Barra asserting that every mile driven and simulation conducted brings them closer to that vision.
Moreover, GM is looking to restructure its joint venture with SAIC Motor in China, as it continues to face losses, including a reported $104 million loss for the second quarter. In response to market conditions, SAIC-GM reduced production by 70% in June, delivering 26,000 vehicles, which is 50% less than the previous year.