General Motors has updated its financial projections for 2024 after exceeding Wall Street’s expectations for the second quarter. The Detroit-based automaker raised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from a previous estimate of $12.5 billion to $14.5 billion. Additionally, targets for operating cash flow and earnings per share have been adjusted upward, while the forecast for net income attributable to shareholders was reduced slightly by less than 1%, now estimated to be between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, which is over a 7% rise compared to the same period last year and surpassing the anticipated $45 billion as per FactSet estimates. Earnings per share stood at $3.06, exceeding the analysts’ forecast of $2.71 and representing a 60% increase from the previous year. Net income rose 14% to $2.9 billion, up from $2.5 billion.
As a result, GM’s stock saw an almost 5% increase in pre-market trading on Tuesday and has risen more than 37% throughout the year. After trading concluded on Monday, GM announced a third-quarter cash dividend, contributing to the stock’s positive performance.
In her letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gasoline-powered trucks and SUVs and noted plans to introduce eight new or redesigned models across various sizes in North America. Barra emphasized the company’s commitment to disciplined growth in the production of the electric Chevrolet Equinox, while acknowledging that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market conditions. Nonetheless, there was an increase in EV sales in the last quarter, she mentioned.
Barra revealed that Cruise, GM’s self-driving subsidiary that paused operations after an incident last year, will shift its focus away from the Origin vehicle to the next-generation Chevrolet Bolt for testing in Texas and Arizona. The company incurred a $600 million charge due to the suspension of the Origin’s production in Detroit.
During a discussion with analysts, Barra explained that using 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 per unit costs and allow for better resource allocation.
Barra reiterated GM’s commitment to its autonomous technology vision, stating, “Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company.”
Additionally, GM is working on restructuring its joint venture in China with SAIC Motor, which has been struggling with losses, reporting a $104 million loss for the second quarter. Production was cut by 70% in June, with only 26,000 vehicles delivered, representing a 50% decrease compared to the previous year, according to Automotive News.