General Motors has raised several financial projections for 2024 after exceeding Wall Street’s expectations in its second quarter earnings report.
The Detroit-based automaker has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous forecast of $12.5 billion to $14.5 billion. It has also raised its targets for operating cash flow and earnings per share. However, the net income expectation attributable to shareholders has been slightly adjusted downwards, now anticipated to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing an increase of more than 7% from the previous year and surpassing the $45 billion forecast from analysts. Earnings per share were reported at $3.06, exceeding the anticipated $2.71, and showing a 60% increase compared to last year. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following this news, GM stock experienced a nearly 5% increase in pre-market trading, contributing to an overall gain of more than 37% for the year. The company also declared a third-quarter cash dividend after trading closed on Monday, adding to the stock’s appeal.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gasoline-powered trucks and SUVs. She mentioned that GM is currently launching eight new or redesigned models across various sizes in North America. Barra also indicated that GM is ramping up production of the electric Chevrolet Equinox, while expressing commitment to disciplined volume growth amidst excitement over early successes in electric vehicles (EVs).
Earlier, Barra noted that GM will not meet its target of producing 1 million EVs in North America by the end of 2025 due to a market slowdown. The company remains flexible, stating it will “build to demand,” although it did report an increase in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, will abandon its Origin vehicle project after scaling back operations last October due to an incident. Instead, the company will utilize the next-generation Chevrolet Bolt to conduct testing in Texas and Arizona. GM incurred a $600 million charge related to halting Origin’s production in Detroit.
During an analyst call, Barra mentioned that switching to the Bolt would address regulatory concerns related to the Origin’s unique design, such as its lack of a traditional steering wheel. This adjustment is also expected to reduce costs per unit and optimize resources.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, stating that every mile and simulation brings the company closer to its goals, asserting that Cruise operates as an AI-first entity.
Furthermore, GM is working to restructure its joint venture with SAIC Motor in China, where it reported a loss of $104 million in the second quarter. In June, SAIC-GM reduced production by 70% and delivered only 26,000 vehicles, which is 50% less than the same period in the previous year.