General Motors has revised its financial projections for 2024 upward after exceeding analysts’ expectations for its second-quarter performance. The company now anticipates adjusted earnings for the year to be between $13 billion and $15 billion, an increase from its previous estimate of $12.5 billion to $14.5 billion, while also raising targets for operating cash flow and earnings per share. However, GM slightly lowered its expectations for net income attributable to shareholders by less than 1%, now forecasting between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, marking a rise of over 7% compared to the previous year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. The company also reported earnings per share of $3.06, exceeding the anticipated $2.71 and reflecting a 60% increase from 2023. Additionally, net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
In response, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has increased more than 37% this year. The company also declared a cash dividend for the third quarter, contributing to the stock’s positive momentum.
CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs in a letter to shareholders, mentioning plans to introduce eight new or redesigned models in North America. Barra assured shareholders that while GM is excited about its electric vehicle (EV) initiatives and their early successes, the company remains committed to disciplined growth in production, particularly for the electric Chevrolet Equinox.
This month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing the delay to a slowdown in the market. The company has expressed a flexible approach, stating it will “build to demand,” though it did see an increase in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, will discontinue its Origin vehicle project following a decrease in operations after an incident last October. Instead, Cruise will pivot to using the next-generation Chevrolet Bolt for testing its vehicles in Texas and Arizona. GM recorded a $600 million charge due to the discontinuation of the Origin’s production in Detroit.
During a call with analysts, Barra indicated that utilizing the Bolt would address regulatory concerns associated with the Origin’s unconventional design, such as the absence of a steering wheel. This shift is expected to lower production costs and streamline GM’s resource allocation.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, stating that each mile and simulation contributes toward that goal, emphasizing Cruise’s identity as an AI-first company.
GM is also working on restructuring its joint venture with SAIC Motor in China, facing financial losses, including a $104 million deficit in the second quarter. Recent reports indicate that SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, which is 50% less than the same period last year.