General Motors has revised its financial outlook for 2024 after exceeding Wall Street’s expectations during the second quarter of the year. The automaker has increased its forecast for adjusted earnings to a range of $13 billion to $15 billion, up from the previous range of $12.5 billion to $14.5 billion, and has also raised its projections for operating cash flow and earnings per share. However, the expectation for net income attributable to shareholders was slightly lowered to between $10 billion and $11.4 billion, a decrease of less than 1%.
In its second-quarter results, GM reported revenue of $47.9 billion, marking a year-over-year increase of over 7% and surpassing Wall Street’s $45 billion expectation. Earnings per share stood at $3.06, exceeding the anticipated $2.71, which represents a 60% increase compared to 2023. Additionally, net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following this positive news, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to an overall increase of over 37% this year. After the market closed on Monday, GM announced a cash dividend for the third quarter, further boosting its shares.
In a letter to shareholders, CEO Mary Barra highlighted the successful performance of the company’s gas-powered trucks and SUVs, mentioning the launch of eight new or redesigned models within North America. She also discussed the scaling of production for the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined growth in the electric vehicle (EV) space, despite a recent acknowledgment that the company would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns.
Additionally, Barra announced that Cruise, GM’s self-driving vehicle division, will abandon plans for its Origin vehicle, which faced operational challenges after an incident last October. Instead, Cruise will focus on using a next-generation Chevrolet Bolt for its testing in Texas and Arizona. GM incurred a $600 million charge related to the halted production of the Origin.
In her comments to analysts, Barra expressed confidence in Cruise’s mission, stating that the company’s goal to innovate mobility through autonomous technology remains steadfast. She also noted that utilizing the Bolt would address regulatory concerns regarding the Origin’s unconventional design and would help reduce costs per unit.
Furthermore, GM is working on restructuring its joint venture with SAIC Motor in China, as it continues to incur losses; the company reported a loss of $104 million for the second quarter. This follows a significant production cut by SAIC-GM, which saw a reduction of 70% and delivered 26,000 vehicles, 50% fewer than the same period last year.