General Motors has raised its financial outlook for 2024 after exceeding Wall Street expectations in the second quarter. The automaker has adjusted its anticipated adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has lifted its targets for operating cash flow and earnings per share, while slightly reducing expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing the $45 billion anticipated by analysts, as per FactSet estimates. The earnings per share stood at $3.06, exceeding the expected $2.71 and reflecting a 60% increase compared to 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion in the same period last year.
Following the earnings report, GM’s stock rose nearly 5% in pre-market trading, with an overall increase of over 37% this year. The automaker also declared a third-quarter cash dividend, contributing to the stock’s momentum.
In a shareholder letter, CEO Mary Barra emphasized the success of GM’s gas-powered trucks and SUVs, mentioning plans to launch eight new or redesigned models in North America. She highlighted the company’s commitment to scaling production of the electric Chevrolet Equinox, stating that while there is excitement around electric vehicles (EVs), the company is focused on disciplined growth.
Barra also acknowledged that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a market slowdown. The firm has indicated it will adapt production to meet demand, although EV sales did experience growth in the recent quarter.
Moreover, Barra announced that Cruise, GM’s self-driving subsidiary, will abandon its Origin vehicle project. Instead, the company will concentrate on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after GM incurred a $600 million charge due to the halt in Origin production.
During a discussion with analysts, Barra stated that utilizing the Bolt would mitigate regulatory concerns about the Origin’s unconventional design, such as the absence of a steering wheel, while also reducing unit costs and streamlining resource management.
Finally, GM is working to restructure its joint venture with SAIC Motor in China, which has been underperforming. For the second quarter, GM reported a $104 million loss from this venture, and production had been cut by 70% in June, resulting in a delivery of only 26,000 vehicles, which is 50% less than the previous year, according to reports.