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 between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its forecasts for operating cash flow and earnings per share, while slightly lowering net income expectations for shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing Wall Street’s expectation of $45 billion, according to FactSet data. Earnings per share reached $3.06, which was above the projected $2.71 and 60% higher than the previous year. Net income rose by 14%, reaching $2.9 billion compared to $2.5 billion a year earlier.
Following this announcement, GM’s stock rose nearly 5% in pre-market trading and has increased by over 37% in 2023. The company also declared a cash dividend for the third quarter after trading closed on Monday, further enhancing its stock appeal.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs while noting that the company is set to launch eight new or redesigned models in North America. She emphasized the ongoing production ramp-up of the electric Chevrolet Equinox and reaffirmed the company’s commitment to disciplined growth in electric vehicle (EV) production despite earlier indicating that GM would not meet its goal of producing 1 million EVs in North America by the end of 2025 due to a slowing market. Nevertheless, EV sales did show growth in the last quarter.
Additionally, it was announced that GM’s autonomous vehicle division, Cruise, will be discontinuing its Origin vehicle after having to scale back operations following an incident last October. Instead, Cruise will focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million expense related to ceasing production of the Origin.
During a conference call, Barra stated that utilizing the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This pivot is expected to reduce costs and enhance resource allocation.
In terms of its international operations, GM is seeking to restructure its joint venture in China with SAIC Motor as it faces significant losses, having reported a $104 million loss in the second quarter. In June, the SAIC-GM partnership reduced production by 70% and delivered 26,000 vehicles, which is 50% lower than a year earlier.