General Motors is enhancing its financial projections for 2024 after exceeding Wall Street’s expectations for the second quarter. The Detroit-based automaker has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share, while slightly lowering 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 an over 7% increase compared to the same period last year and surpassing Wall Street’s expectation of $45 billion, as per FactSet estimates. The earnings per share reached $3.06, exceeding the $2.71 anticipated by analysts and representing a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock saw a nearly 5% rise in pre-market trading on Tuesday, contributing to a year-to-date increase of more than 37%. After the market closed on Monday, GM also declared a cash dividend for the third quarter, further boosting stock performance.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, mentioning that the company is launching eight new or redesigned models across compact, mid-size, and full-size categories in North America. Barra expressed excitement about the scaling production of the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined growth in electric vehicle (EV) production, despite recently acknowledging that they will not meet the goal of producing 1 million EVs in North America by the end of 2025 due to a market slowdown.
Additionally, Barra announced that Cruise, GM’s autonomous vehicle division, will discontinue its Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a previous incident that prompted Cruise to scale back its operations. GM incurred a $600 million charge related to stopping production of the Origin.
Barra stated that transitioning to the Bolt would address regulatory concerns regarding the Origin’s unconventional design, like the absence of a steering wheel, while also reducing costs and optimizing resources.
Finally, GM is working to restructure its joint venture in China with SAIC Motor, as it continues to face losses. The company reported a $104 million loss for the second quarter, with SAIC-GM cutting production by 70% in June and delivering 26,000 vehicles, which is a 50% decrease compared to a year earlier.