General Motors is elevating several financial projections for 2024 following a strong performance that exceeded Wall Street’s expectations in the second quarter.
The automaker has adjusted its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, it has raised its targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders has been slightly reduced, now projected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase from the prior year and surpassing the $45 billion anticipated by analysts, according to FactSet estimates. The company’s earnings per share stood at $3.06, well above the expected $2.71 and 60% higher than in 2023. Net income for the quarter rose 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has seen an overall increase of more than 37% this year. After market close on Monday, GM also declared a cash dividend for the third quarter, further boosting investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, revealing plans to launch eight new or redesigned models across various categories in North America. She mentioned that GM is ramping up production of the electric Chevrolet Equinox, affirming the company’s commitment to disciplined growth in electric vehicle (EV) sales despite earlier projections that may not be met.
Barra noted earlier this month that GM would not achieve its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company plans to adapt its strategy by “building to demand,” although it reported growth in EV sales in the last quarter.
In addition, Barra announced that Cruise, GM’s self-driving subsidiary, would discontinue its Origin vehicle model after scaling back its operations due to a previous incident. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona, following a $600 million charge linked to the halted production of the Origin in Detroit.
During an analyst call, Barra emphasized that using the Bolt would help address regulatory concerns surrounding the unique design of the Origin, such as the absence of a steering wheel. This shift is expected to reduce per unit costs and optimize GM’s resources.
“Our vision to transform mobility using autonomous technology remains firm, and each mile traveled and every simulation brings us closer because Cruise operates as an AI-first company,” Barra stated.
Moreover, GM is working to restructure its joint venture in China with SAIC Motor amid ongoing losses. The company reported a $104 million loss for the second quarter, while SAIC-GM significantly reduced production by 70% in June, delivering 26,000 vehicles, which is 50% lower than the previous year, according to Automotive News.