General Motors (GM) has announced it is raising several financial projections for 2024 following strong results that exceeded Wall Street expectations in the second quarter.
The Detroit-based company has increased its anticipated adjusted earnings for the fiscal 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 has raised its targets for operating cash flow and earnings per share. The forecast for net income attributable to shareholders was slightly lowered to between $10 billion and $11.4 billion, a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% from the previous year and surpassing Wall Street’s expectation of $45 billion. The earnings per share reached $3.06, exceeding the anticipated $2.71 and representing a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result of the positive performance, GM’s stock saw a nearly 5% increase in pre-market trading on Tuesday. This year, the stock has appreciated by more than 37%. Additionally, GM announced a third-quarter cash dividend after the close of trading on Monday, contributing to the stock’s boost.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gasoline-powered trucks and SUVs. She mentioned that GM is preparing to launch eight new or redesigned models across compact, mid-size, and full-size categories in North America. Barra also emphasized the scaling up of production for the electric Chevrolet Equinox, stating that while they are excited about their electric vehicles (EVs) and early successes, they remain committed to disciplined volume growth.
Earlier this 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. The company plans to remain flexible and build according to demand, although it did witness growth in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, will abandon its Origin vehicle, which faced operational challenges after an incident last October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt as it tests vehicles in Texas and Arizona. GM incurred a $600 million charge related to the suspension of Origin production in Detroit.
Barra remarked that using the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This shift is expected to reduce costs per vehicle and enable GM to optimize its resources.
“Our vision to transform mobility using autonomous technology remains intact, and each mile traveled and every simulation brings us closer because Cruise operates as an AI-first company,” Barra stated.
Furthermore, GM is working on restructuring its joint venture with SAIC Motor in China as it continues to experience losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70% and delivered 26,000 vehicles, which is 50% less than the previous year, according to industry reports.