General Motors has announced an increase in several financial projections for 2024 following a strong performance in the second quarter that exceeded Wall Street expectations.
The Detroit-based automaker has raised its adjusted earnings forecast for the year to between $13 billion and $15 billion, up from a previous range of $12.5 billion to $14.5 billion. Additionally, GM has increased its targets for operating cash flow and earnings per share. However, expectations for net income attributable to shareholders have been slightly decreased by less than 1%, now projected to be between $10 billion and $11.4 billion.
In terms of revenue, GM reported $47.9 billion for the second quarter, marking a more than 7% increase compared to the previous year and surpassing the $45 billion anticipated by analysts, as per FactSet estimates. Earnings per share stood at $3.06, exceeding the expected $2.71, and reflecting a 60% increase from 2023. Net income climbed by 14% to $2.9 billion, up from $2.5 billion.
Following this news, GM’s stock saw a nearly 5% increase in pre-market trading on Tuesday and has risen over 37% this year. Additionally, GM announced a third-quarter cash dividend after market close on Monday, further boosting investor sentiment.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned the company’s plans to introduce eight new or redesigned models across various segments in North America. She also assured shareholders that the company is ramping up production of the electric Chevrolet Equinox, emphasizing a commitment to disciplined volume growth despite earlier statements 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. GM intends to remain flexible and adjust production to meet demand, although it did report an increase in EV sales last quarter.
Barra also revealed that Cruise, GM’s self-driving division that previously faced setbacks, will discontinue its Origin vehicle and instead focus on utilizing the next-generation Chevrolet Bolt to test vehicles in Texas and Arizona. This adjustment is expected to address regulatory concerns surrounding the unique design of the Origin, which lacks a steering wheel, and will help reduce production costs.
“Our vision to transform mobility using autonomous technology remains intact,” Barra stated. “Every mile traveled and every simulation brings us closer, as Cruise operates as an AI-first company.”
Additionally, GM is in the process of restructuring its joint venture with SAIC Motor in China, as it continues to experience financial losses, including a $104 million loss in the second quarter. Reports indicate that SAIC-GM has reduced production by 70%, delivering only 26,000 vehicles — a 50% decline from the previous year.