General Motors has increased several financial projections for 2024 after exceeding Wall Street’s expectations in its second quarter. The Detroit-based automaker has raised its forecast for adjusted earnings this year to a range of $13 billion to $15 billion, up from $12.5 billion to $14.5 billion. Additionally, targets for operating cash flow and earnings per share have also been lifted, while expectations for net income attributable to shareholders have been slightly decreased, now estimated between $10 billion and $11.4 billion.
In its second-quarter report, GM reported revenue of $47.9 billion, marking more than a 7% increase from the prior year and surpassing the $45 billion predicted by analysts according to FactSet estimates. Earnings per share reached $3.06, exceeding the anticipated $2.71 and showing a 60% increase compared to 2023. Net income rose by 14%, totaling $2.9 billion, up from $2.5 billion.
As a result of these positive financial results, GM shares surged nearly 5% in pre-market trading on Tuesday, and the stock has increased over 37% this year. The company also announced a third-quarter cash dividend after market close on Monday, further boosting its stock.
In a letter to shareholders, CEO Mary Barra praised the strong performance of the company’s gas-powered trucks and SUVs. She highlighted that GM is set to launch eight new or redesigned compact, mid-size, and full-size models in North America. Barra mentioned the company is ramping up production of the electric Chevrolet Equinox, stressing a commitment to disciplined growth in electric vehicle (EV) production despite earlier remarks about not meeting its target of producing 1 million EVs in North America by the end of 2025 due to a market slowdown. However, GM did see growth in EV sales last quarter.
In another update, Barra announced that Cruise, GM’s self-driving division, would abandon its Origin vehicle project, which had faced rollback due to incidents last October. Instead, Cruise will focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the halt in Origin production.
During a call with analysts, Barra indicated that utilizing the Bolt would address regulatory concerns regarding the Origin’s unconventional design. This shift is expected to reduce per unit costs and help GM streamline its resources.
Barra reaffirmed the company’s commitment to shifting mobility through autonomous technology and emphasized that every mile traveled and every simulation contributes to this vision. Furthermore, GM is working on restructuring its joint venture in China with SAIC Motor, as the company continues to face losses, including a $104 million loss reported for the second quarter. In June, production was cut by 70% at SAIC-GM, with vehicle deliveries dropping to 26,000, a 50% decline compared to the previous year.