General Motors has increased several financial projections for 2024 after exceeding Wall Street expectations for its second quarter results.
The automaker is now anticipating adjusted earnings between $13 billion and $15 billion for the year, a rise from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has adjusted its targets for operating cash flow and earnings per share. The forecast for net income attributable to shareholders has been slightly lowered, now expected to be between $10 billion and $11.4 billion.
For the second quarter, GM reported revenues of $47.9 billion, marking an increase of over 7% from the previous year and surpassing the $45 billion expected by analysts, according to FactSet estimates. Earnings per share reached $3.06, exceeding the $2.71 forecast by analysts and showing a 60% improvement compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
As a result, GM’s stock surged nearly 5% in pre-market trading, reflecting a more than 37% increase in value this year. The company also announced a cash dividend for the third quarter, which further boosted investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, while noting the launch of eight new or redesigned vehicle models across various segments in North America. She emphasized the scaling up of production for the electric Chevrolet Equinox, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Despite this optimism, Barra acknowledged that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company has indicated it will adapt to demand, although EV sales did see an increase in the last quarter.
Barra also announced that Cruise, GM’s autonomous driving unit, will discontinue production of its Origin vehicle, which faced operational setbacks after an incident last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to ending production of the Origin in Detroit.
During a call with analysts, Barra explained that using the Bolt would address regulators’ concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This change is expected to reduce costs and enhance resource optimization.
“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 stated.
Additionally, GM is working on restructuring its joint venture with SAIC Motor in China, as the company continues to face financial losses, reporting a $104 million loss for the second quarter. Earlier this year, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% fewer than the same period last year, according to Automotive News.