General Motors is adjusting its financial outlook for 2024 following impressive second-quarter results that significantly exceeded Wall Street expectations. The automaker has increased its projected adjusted earnings for this year to a range of $13 billion to $15 billion, up from an earlier estimate of $12.5 billion to $14.5 billion. GM also raised its targets for operating cash flow and earnings per share, though it slightly decreased its expectations for net income attributable to shareholders, now projected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported a revenue of $47.9 billion, marking a rise of over 7% from the prior year and surpassing analysts’ forecast of $45 billion. The company’s earnings per share reached $3.06, significantly higher than the expected $2.71 and 60% more than the same quarter last year. Net income grew by 14%, reaching $2.9 billion, compared to $2.5 billion a year earlier.
Following the announcement, GM’s stock experienced a nearly 5% increase in pre-market trading on Tuesday, contributing to a remarkable 37% growth in stock value for the year. Adding to this positive momentum, GM declared a third-quarter cash dividend shortly before trading closed on Monday.
In her letter to shareholders, CEO Mary Barra emphasized the robust performance of GM’s gasoline-powered trucks and SUVs. She mentioned the company’s plans to launch multiple new or redesigned vehicle models, encompassing compact, mid-size, and full-size categories, in North America. Barra also highlighted efforts to increase production of the electric Chevrolet Equinox, demonstrating GM’s dedication to disciplined growth in the electric vehicle (EV) sector despite a reassessment of its goal to produce 1 million EVs in North America by 2025 due to market challenges.
Additionally, Barra provided updates on GM’s self-driving unit, Cruise, which is pivoting away from its planned Origin vehicle. Instead, the company will leverage the next-generation Chevrolet Bolt for testing in Texas and Arizona. This strategic move aims to address regulatory concerns related to the Origin’s unconventional design. GM incurred a $600 million charge as a consequence of halting Origin production in Detroit.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, remarking that each mile traveled brings the company closer to its vision.
Lastly, GM is restructuring its joint venture in China with SAIC Motor amid ongoing losses, having recorded a $104 million loss for the second quarter. The venture saw production cuts of 70% in June, resulting in a 50% decline in vehicle deliveries compared to the previous year.
This positive trajectory for GM signals a robust recovery and growth potential as it adapts to the evolving automotive landscape, blending traditional and electric vehicle offerings while also prioritizing advancements in autonomous technology. The company’s proactive strategies in response to market conditions and its commitment to innovation could pave the way for future successes.