General Motors has elevated several financial projections for 2024 following a strong performance that exceeded Wall Street’s expectations for its second quarter.
The Detroit automaker has adjusted its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from its previous estimate of $12.5 billion to $14.5 billion. Furthermore, GM has raised its targets for operating cash flow and earnings per share. However, the expected net income attributable to shareholders has been adjusted down slightly, now projected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing a more than 7% increase year-over-year and surpassing the $45 billion forecasted by analysts. Earnings per share were recorded at $3.06, outpacing the $2.71 per share expected and marking a 60% increase from 2023. The company’s net income increased by 14% to $2.9 billion, surpassing the previous figure of $2.5 billion.
Following this announcement, GM’s stock surged nearly 5% in pre-market trading and has seen an overall increase of over 37% this year. Additionally, GM declared a cash dividend for the third quarter, contributing to the stock’s rise.
In a letter addressed to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and noted that the company is gearing up to launch eight new or redesigned models across various categories in North America. Barra emphasized GM’s commitment to disciplined growth as it expands production of the electric Chevrolet Equinox, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
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 due to a slowdown in the market. The company indicated it would remain flexible and “build to demand,” although its EV sales did experience growth last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle program, opting instead to utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after GM incurred a $600 million charge related to the suspension of the Origin’s production in Detroit.
During a call with analysts, Barra mentioned that using the Bolt would address any regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. She stated that the switch would also reduce costs per unit and allow GM to better allocate resources.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled and every simulation brings us closer because Cruise is an AI-first company,” Barra concluded in her statement.
Lastly, GM is working on restructuring its joint venture with SAIC Motor in China as it continues to face financial losses, having taken a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% less compared to the previous year.