General Motors has elevated several financial projections for 2024 following a strong performance in the second quarter that exceeded Wall Street’s expectations.
The Detroit-based automaker has increased its forecast for adjusted earnings to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM raised its targets for operating cash flow and earnings per share, while slightly reducing its net income outlook for shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
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 analyst expectations of $45 billion, according to FactSet. Earnings per share reached $3.06, exceeding the anticipated $2.71 and representing a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
As a result of the positive news, GM’s stock rose nearly 5% in pre-market trading on Tuesday, and the stock has gained over 37% this year. Upon market close on Monday, GM announced a cash dividend for the third quarter, providing an additional boost to its stock value.
In her letter to shareholders, CEO Mary Barra highlighted the success of the company’s gasoline-powered trucks and SUVs. She noted that GM is launching eight new or redesigned models in North America across various sizes, including compact, mid-size, and full-size vehicles. Barra emphasized the ongoing production scale-up of the electric Chevrolet Equinox and stated that the company is focused on steady volume growth in the EV sector.
Earlier in the 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 intends to remain flexible and will “build to demand,” although it did see an increase in EV sales during the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle project to focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a previous incident that led to a temporary halt in operations. GM incurred a $600 million charge linked to the halt in Origin production in Detroit.
During a conference call with analysts, Barra indicated that utilizing the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacks a traditional steering wheel. This shift is expected to reduce costs per unit and enhance resource optimization.
Barra reaffirmed the company’s commitment to advancing mobility through autonomous technology, asserting that each mile traveled and every simulation brings them closer to their goals, as Cruise operates as an AI-first company.
Moreover, GM is working to reshape its joint venture with SAIC Motor in China, where it has been facing ongoing losses—a $104 million loss was reported for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, which is 50% fewer than the same period last year, according to Automotive News.