General Motors has increased several financial projections for 2024 after exceeding Wall Street’s expectations in its second quarter results.
The Detroit-based automaker has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. The company also adjusted its targets for operating cash flow and earnings per share, though its projections for net income attributable to shareholders have decreased slightly, now estimated between $10 billion and $11.4 billion.
In the second quarter, GM recorded revenue of $47.9 billion, marking a more than 7% increase from the same period last year and surpassing the $45 billion estimate by analysts, according to FactSet. The earnings per share reached $3.06, exceeding expectations of $2.71 and representing a 60% growth compared to 2023. Additionally, the company’s net income rose by 14%, from $2.5 billion to $2.9 billion.
GM’s stock rose nearly 5% in pre-market trading on Tuesday and has seen an increase of over 37% this year. Following the close of trading on Monday, GM announced a cash dividend for the third quarter, further buoying investor confidence.
In a letter to shareholders, CEO Mary Barra emphasized the strong performance of GM’s gas-powered trucks and SUVs, mentioning the launch of eight new or redesigned models in North America, spanning compact to full-size categories. Barra highlighted the scaling up of production for the electric Chevrolet Equinox, stating the company is committed to “disciplined volume growth” even as it celebrates its initial successes in electric vehicles.
Earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market. The company plans to adapt its production to align with consumer demand, though electric vehicle sales have increased over the last quarter.
Additionally, Barra announced a strategic shift for Cruise, GM’s self-driving unit, which had to scale back operations after a setback last October. Cruise will abandon its Origin vehicle and instead focus on the next-generation Chevrolet Bolt for its testing in Texas and Arizona. GM incurred a $600 million expense linked to halting the Origin’s production in Detroit.
During an analyst call, Barra expressed that using the Bolt would address regulatory concerns regarding the unique design of the Origin, notably its lack of a steering wheel. This change is expected to reduce costs per unit and enhance the efficiency of resources utilized by GM.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, stating that each mile and simulation propels Cruise closer to its goals as an AI-first company.
Furthermore, GM is working on restructuring its joint venture in China with SAIC Motor, facing ongoing losses, including a reported $104 million loss for the second quarter. SAIC-GM cut production by 70% in June, delivering 26,000 vehicles, which is 50% less than the previous year, according to Automotive News.