General Motors has revised its financial projections for 2024 following a strong performance in the second quarter that exceeded Wall Street expectations. The automaker has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from an earlier forecast of $12.5 billion to $14.5 billion. Additionally, GM raised its targets for operating cash flow and earnings per share, although it slightly reduced its forecast for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, surpassing the $45 billion anticipated by analysts and marking an increase of more than 7% compared to the previous year. Earnings per share hit $3.06, which was significantly above the expected $2.71 and represented a 60% increase from 2023. Net income rose by 14%, reaching $2.9 billion, compared to $2.5 billion in the same quarter last year.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading, bringing its total increase for the year to over 37%. The company also declared a third-quarter cash dividend, contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She also mentioned the introduction of eight new or redesigned vehicle models across various categories in North America. Barra assured shareholders of GM’s commitment to disciplined growth in electric vehicle production, specifically mentioning the scaling up of the Chevrolet Equinox.
However, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market. Despite this, the company reported growth in EV sales during the last quarter.
Barra revealed that Cruise, GM’s self-driving division, will discontinue its Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after Cruise faced operational setbacks last October. GM incurred a $600 million charge due to the halt in Origin production in Detroit. Barra emphasized that this shift would address regulatory concerns associated with the Origin’s unconventional design and would also lead to more efficient resource management.
GM is also working to restructure its joint venture with SAIC Motor in China amid ongoing losses, with the automaker reporting a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is a 50% decline compared to the previous year.