General Motors has adjusted its financial projections for 2024 following a strong second-quarter performance that exceeded Wall Street’s predictions. The automotive giant now expects its adjusted earnings to range between $13 billion and $15 billion, a rise from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has increased its targets for operating cash flow and earnings per share, while slightly lowering the anticipated net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing a more than 7% increase compared to the same period last year and surpassing Wall Street’s forecast of $45 billion. The company’s earnings per share were $3.06, exceeding analysts’ expectations of $2.71 and reflecting a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result of this positive financial outlook, GM’s stock rose nearly 5% in pre-market trading on Tuesday, and it has increased by over 37% in value this year. The company also announced a cash dividend for the third quarter, contributing to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned that the company is set to launch eight new or redesigned models across various sizes in North America. Barra confirmed that GM is ramping up production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in electric vehicle (EV) production.
However, Barra had previously stated 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 plans to remain flexible and adapt production to meet demand, though EV sales did see a rise in the last quarter.
Additionally, Barra announced changes to its self-driving unit, Cruise, which will no longer pursue the development of the Origin vehicle following operational challenges. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge linked to halting the Origin’s production in Detroit.
During a call with analysts, Barra highlighted that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This shift is expected to lower costs per unit and improve resource allocation.
Barra reaffirmed GM’s commitment to revolutionizing mobility through autonomous technology, stating that every mile and simulation contributes to this vision. Moreover, GM is working on restructuring its joint venture in China with SAIC Motor as it copes with ongoing losses, reporting a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production, delivering only 26,000 vehicles, which is 50% less than the previous year.