General Motors has revised several financial projections for 2024 following a strong performance that exceeded Wall Street’s expectations for its second quarter. The automaker has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous forecast of $12.5 billion to $14.5 billion. Additionally, it raised its targets for operating cash flow and earnings per share, although the expected net income attributable to shareholders was slightly reduced by less than 1% to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a rise of over 7% from the previous year and surpassing Wall Street’s expectations of $45 billion according to FactSet estimates. Earnings per share reached $3.06, exceeding the anticipated $2.71 and reflecting a 60% increase compared to 2023. The company also saw a 14% increase in net income, rising to $2.9 billion from $2.5 billion.
As a result of these announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to an overall increase of more than 37% this year. Following the market close on Monday, GM declared a third-quarter cash dividend, which further enhanced investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, noting the launch of eight new or redesigned models in North America. She also mentioned the ramp-up in production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined volume growth alongside its excitement over early electric vehicle (EV) successes.
Despite pride in its EV efforts, Barra acknowledged earlier this month that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns. The automaker intends to remain flexible in production, adapting to demand, despite experiencing growth in EV sales last quarter.
Additionally, Barra announced changes to Cruise, GM’s self-driving subsidiary, which recently paused operations following an incident last October. The company will shift its focus away from the Origin vehicle to employing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM has incurred a $600 million charge due to the halt in Origin production.
During a discussion with analysts, Barra stated that utilizing the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This decision is expected to reduce unit costs and optimize resources.
Barra concluded by reaffirming the company’s vision for transforming mobility through autonomous technology, insisting that every simulation and mile traveled brings Cruise closer to this goal, as it positions itself as an AI-first company.
Furthermore, GM is restructuring its joint venture with SAIC Motor in China, as it continues to face losses, having reported a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, resulting in the delivery of 26,000 vehicles, or 50% fewer than the previous year, according to Automotive News.