General Motors has increased its financial outlook for 2024 after exceeding Wall Street expectations during its second quarter results. The Detroit-based automaker now anticipates adjusted earnings between $13 billion and $15 billion, a rise from the previous estimate of $12.5 billion to $14.5 billion. It has also revised its projections for operating cash flow and earnings per share, though expectations for net income attributable to shareholders have seen a slight decrease of less than 1%, now estimated at between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% compared to last year and surpassing the Wall Street forecast of $45 billion, according to FactSet. Earnings per share were reported at $3.06, exceeding analysts’ expectations of $2.71 and demonstrating a 60% growth from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
In response to the results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, building on a year-to-date increase of more than 37%. Following the market close on Monday, GM announced a cash dividend for the third quarter, which further boosted investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the strong performance of its gasoline-powered trucks and SUVs, mentioning the upcoming launch of eight new or redesigned models across compact, mid-size, and full-size categories in North America. She also addressed the scaling of production for the electric Chevrolet Equinox, affirming the company’s commitment to “disciplined volume growth” despite earlier remarks indicating 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.
Barra shared that the company’s self-driving division, Cruise, will discontinue its Origin vehicle following a production halt after an incident last October. Instead, Cruise plans to leverage the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge associated with the suspension of Origin production in Detroit.
During an analyst call, Barra explained that using the Bolt would address regulators’ concerns regarding the Origin’s unconventional design, such as its lack of a steering wheel. This shift is expected to reduce per-unit costs and help optimize resources.
“Our vision to transform mobility using autonomous technology remains unchanged, and with every mile traveled and every simulation completed, we move closer to our goals because Cruise operates as an AI-first company,” Barra stated.
In addition, GM is working on restructuring its joint venture in China with SAIC Motor as it faces ongoing losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM slashed production by 70%, delivering 26,000 vehicles, which is 50% less than the previous year, according to Automotive News.