General Motors has revised its financial projections for 2024 following a significant second-quarter performance that exceeded Wall Street expectations. The automaker now anticipates adjusted earnings between $13 billion and $15 billion, an increase from its previous forecast of $12.5 billion to $14.5 billion. In addition, GM has updated its targets for operating cash flow and earnings per share, although it slightly lowered its expected net income for shareholders to between $10 billion and $11.4 billion, a reduction of less than 1%.
In the second quarter, GM reported revenues of $47.9 billion, marking a more than 7% increase from the previous year and surpassing Wall Street’s estimate of $45 billion, according to FactSet. Earnings per share reached $3.06, significantly higher than the $2.71 anticipated by analysts and 60% greater than the same period in 2023. Net income rose 14% to $2.9 billion, compared to $2.5 billion in 2022.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to an overall rise of more than 37% for the year. Additionally, GM announced a cash dividend for the third quarter, which further bolstered investor confidence.
In a letter to shareholders, CEO Mary Barra emphasized the success of GM’s gas-powered trucks and SUVs, noting the launch of eight new or redesigned vehicle models in North America. Barra affirmed GM’s commitment to disciplined growth in electric vehicle production, specifically the Chevrolet Equinox, despite a slowdown in the market that will prevent the company from reaching its goal of 1 million electric vehicles in North America by the end of 2025.
Barra also revealed that Cruise, GM’s self-driving unit, would discontinue its Origin vehicle, opting instead to utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a $600 million write-off related to the halted production of the Origin.
During a call with analysts, Barra stated that the shift to the Bolt will address regulatory concerns about the Origin’s unique design and will also reduce production costs. She reiterated that GM’s objective to advance autonomous technology remains steadfast, emphasizing the importance of every mile traveled and simulation executed in this pursuit.
Furthermore, GM is working on restructuring its joint venture with SAIC Motor in China due to ongoing financial losses, reporting a $104 million loss in the second quarter. Production cuts of 70% implemented by SAIC-GM have resulted in the delivery of just 26,000 vehicles, a 50% decrease from the previous year.