General Motors has raised several financial projections for 2024 following impressive results that exceeded Wall Street’s expectations for its second quarter.
The automaker has adjusted its expected adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders has been slightly lowered by less than 1% to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the same period last year and surpassing the $45 billion that Wall Street anticipated, according to FactSet estimates. The company achieved earnings per share of $3.06, outpacing analysts’ expectations of $2.71 per share and showing a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
In response to the financial results, GM’s stock rose nearly 5% in pre-market trading on Tuesday. The stock has increased over 37% this year. Following the market close on Monday, GM also announced a cash dividend for the third quarter, contributing to the stock’s positive outlook.
In a letter addressed to shareholders, CEO Mary Barra highlighted the strong performance of the company’s gas-powered trucks and SUVs. She mentioned that GM is set to launch eight new or redesigned vehicle models in North America. Additionally, Barra pointed out that the company is ramping up production of the electric Chevrolet Equinox, asserting their commitment to disciplined growth despite early successes in the electric vehicle market.
Earlier this month, Barra indicated 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. The company has promised to adapt its production to meet demand, even as EV sales increased in the last quarter.
Barra also announced that Cruise, GM’s self-driving unit, is discontinuing its Origin vehicle model in favor of the next-generation Chevrolet Bolt, which will be used for testing in Texas and Arizona. This decision follows a $600 million charge related to stopping the Origin’s production in Detroit.
In a call with analysts, Barra explained that using the Bolt would help alleviate regulatory concerns regarding the unique design of the Origin, which lacks a steering wheel. This change will also reduce production costs and allow GM to better allocate its resources.
GM is also trying to restructure its joint venture in China with SAIC Motor, which has been incurring losses. The company reported a $104 million loss for the second quarter. In June, SAIC-GM cut its production by 70% and delivered 26,000 vehicles, representing a 50% decline compared to the previous year, according to Automotive News.