General Motors has raised several financial projections for 2024 following a strong performance that exceeded Wall Street’s expectations in the second quarter.
The Detroit-based automaker has increased its forecast for adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. The company also improved its targets for operating cash flow and earnings per share, although it slightly reduced expectations for net income attributable to 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 over a 7% increase compared to the previous year and surpassing Wall Street’s expectation of $45 billion, as per FactSet estimates. Earnings per share reached $3.06, exceeding analysts’ predictions of $2.71 and representing a 60% rise from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following this news, GM’s stock rose nearly 5% in pre-market trading and has increased over 37% this year. The company also announced a third-quarter cash dividend after trading closed on Monday, which contributed to the stock’s uptick.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, stating that the company is launching eight new or redesigned models across compact, mid-size, and full-size categories in North America. Barra emphasized the scaling of production for the electric Chevrolet Equinox and expressed a commitment to disciplined volume growth, despite earlier comments indicating that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns.
Barra also shared that Cruise, GM’s self-driving division, would discontinue its Origin vehicle after a pause in operations due to a previous incident. Instead, the focus will shift to utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes with a $600 million charge related to the cessation of Origin production in Detroit.
During an analyst call, Barra noted that the transition to the Bolt would address regulatory concerns regarding the Origin’s unconventional design, including the absence of a steering wheel. This shift is expected to reduce unit costs and assist GM in optimizing its resources.
“Our vision to transform mobility using autonomous technology remains steadfast, and every mile traveled, and every simulation, brings us closer because Cruise operates as an AI-first company,” Barra stated.
Additionally, GM is actively working to restructure its joint venture with SAIC Motor in China, as it faces ongoing losses. In the second quarter, GM reported a loss of $104 million from this venture. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% lower than the same period last year, according to Automotive News.