General Motors has raised its financial projections for 2024 following strong performance in the second quarter, surpassing expectations set by Wall Street. The Detroit-based automaker has increased 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, and it has also adjusted its targets for operating cash flow and earnings per share. The anticipated net income attributable to shareholders was slightly reduced by under 1%, now expected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported a revenue of $47.9 billion, marking an increase of more than 7% from the prior year and exceeding the anticipated $45 billion, according to FactSet estimates. Earnings per share reached $3.06, significantly higher than the $2.71 expected by analysts and reflecting a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
As a result of this positive performance, GM shares surged nearly 5% in pre-market trading on Tuesday and have gained over 37% this year. On Monday, GM announced a third-quarter cash dividend, further boosting its stock value.
In a letter to shareholders, CEO Mary Barra emphasized the success of GM’s gas-powered trucks and SUVs, announcing plans to introduce eight new or redesigned models in North America. Additionally, she noted that GM is ramping up production of the electric Chevrolet Equinox and expressed commitment to disciplined volume growth in electric vehicles (EVs), despite earlier admitting that the company will not achieve its target of producing 1 million EVs in North America by the end of 2025 due to a market slowdown. However, GM did report an increase in EV sales last quarter.
Barra also shared that Cruise, GM’s autonomous vehicle unit which had to scale back after an incident last October, will no longer pursue its Origin vehicle model. Instead, the company will focus on utilizing the next-generation Chevrolet Bolt during testing in Texas and Arizona. GM reported a $600 million charge linked to the halt in production of the Origin in Detroit.
In a call with analysts, Barra explained that transitioning to the Bolt will help alleviate regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This pivot will also reduce costs per unit and allow GM to optimize resources.
GM continues to navigate challenges with its joint venture in China with SAIC Motor, which has experienced losses, including a $104 million loss in the second quarter. In June, production at SAIC-GM was cut by 70%, resulting in the delivery of only 26,000 vehicles—50% less than the same period last year, according to Automotive News.