General Motors is adjusting its financial outlook for 2024 following impressive second-quarter results that exceeded Wall Street predictions. The automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous forecast of $12.5 billion to $14.5 billion, while also raising expectations for operating cash flow and earnings per share. However, the estimate for net income attributable to shareholders has been slightly reduced by less than 1%, now ranging from $10 billion to $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, marking an increase of over 7% compared to the same period last year and surpassing the expected $45 billion. Earnings per share reached $3.06, significantly higher than the anticipated $2.71, and representing a 60% increase from 2023. Net income also saw a 14% growth, rising to $2.9 billion from $2.5 billion.
Following the announcement, GM’s stock rose nearly 5% in pre-market trading, contributing to an overall increase of more than 37% in stock value this year. Additionally, GM declared a third-quarter cash dividend, further boosting investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the strong performance of the company’s gas-powered trucks and SUVs. She also mentioned the ongoing launch of eight new or redesigned vehicle models in North America, including the scaling of production for the electric Chevrolet Equinox. Barra emphasized GM’s commitment to disciplined growth in electric vehicle (EV) production, despite earlier comments suggesting that the company would not meet its target of producing 1 million EVs in North America by the end of 2025 due to market slowdowns.
Barra also announced a shift in focus for Cruise, GM’s self-driving division, which had to scale back operations after an incident last October. The company will abandon the Origin vehicle and instead concentrate on the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM has incurred a $600 million charge related to the discontinuation of the Origin’s production in Detroit.
During an analyst call, Barra expressed that this change would alleviate regulatory concerns about the Origin’s unconventional design and would lower production costs while optimizing resources. She reaffirmed GM’s commitment to advancing mobility through autonomous technology, stating that each mile traveled and simulation brings the company closer to its goals.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor, facing financial difficulties that resulted in a $104 million loss in the second quarter. In June, the joint venture significantly reduced production by 70%, delivering only 26,000 vehicles, which is 50% lower than the previous year.