General Motors is raising its financial outlook for 2024 after exceeding Wall Street’s expectations for its second quarter performance.
The Detroit-based automaker has adjusted its projected adjusted earnings for the year upward to between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, the company has raised its targets for operating cash flow and earnings per share, although it slightly lowered the expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter alone, GM reported revenue of $47.9 billion, which marks a more than 7% increase from the previous year, surpassing Wall Street’s expectation of $45 billion. The earnings per share stood at $3.06, exceeding analysts’ projections of $2.71 and reflecting a growth of 60% compared to 2023. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion in the same quarter last year.
Following this news, GM’s stock surged nearly 5% in pre-market trading and has seen an overall increase of more than 37% this year. The company also announced a third-quarter cash dividend after trading closed on Monday, contributing to the positive momentum in its stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, stating that the company is preparing to launch eight new or redesigned models in North America. She emphasized GM’s commitment to disciplined volume growth, particularly as the company scales production of the electric Chevrolet Equinox.
Barra acknowledged earlier this month that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown, but stated that EV sales had increased last quarter.
Furthermore, Barra revealed that Cruise, GM’s self-driving unit that had previously scaled back operations after an incident last October, would discontinue its Origin vehicle. Instead, Cruise will focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM has incurred a $600 million charge associated with halting production of the Origin in Detroit.
During a call with analysts, Barra noted that switching to the Bolt would address regulatory concerns regarding the Origin’s unconventional design and aid in reducing unit costs. She reaffirmed Cruise’s commitment to transforming mobility through autonomous technology, stating that each mile and simulation brings the company closer to its vision.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor as it faces ongoing losses, reporting a $104 million loss for the second quarter. In June, production was cut by 70%, resulting in only 26,000 vehicle deliveries, which is a 50% decline compared to the previous year.