General Motors has updated its financial projections for 2024 after exceeding Wall Street expectations in the second quarter. The Detroit-based automaker raised 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. It also adjusted its targets for operating cash flow and earnings per share. However, the outlook for net income attributable to shareholders was slightly reduced by less than 1%, now projected to be between $10 billion and $11.4 billion.
In its second-quarter results, GM reported revenue of $47.9 billion, reflecting over a 7% increase from the same period last year, and exceeding the $45 billion anticipated by analysts. Earnings per share reached $3.06, higher than the expected $2.71 and 60% greater than the previous year. Net income rose 14% to $2.9 billion from $2.5 billion.
Following these announcements, GM shares surged nearly 5% in pre-market trading on Tuesday, contributing to a 37% increase in stock value so far this year. On top of this, GM declared a third-quarter cash dividend, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of its gasoline-powered trucks and SUVs, while mentioning plans to launch eight new or redesigned compact, mid-size, and full-size models across North America. Barra also discussed the ramp-up of production for the electric Chevrolet Equinox, emphasizing the company’s commitment to controlled volume growth despite earlier predictions not being met for 1 million electric vehicle production in North America by 2025 due to a slowdown in the market.
Additionally, she revealed that Cruise, GM’s self-driving unit that had to retract its operations following an incident last October, will abandon plans for its Origin vehicle. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona, having incurred a $600 million charge related to the cessation of Origin production in Detroit.
Barra assured analysts that utilizing the Bolt would alleviate any regulatory concerns surrounding the Origin’s unconventional design, which lacked a steering wheel. This strategic pivot is expected to reduce costs per unit and optimize resource allocation.
GM is also revising its joint venture with SAIC Motor in China amid continuing losses, reporting a $104 million loss for the second quarter. Production cuts by SAIC-GM in June included a 70% reduction, leading to only 26,000 vehicle deliveries, which is a significant drop of 50% compared to the previous year.