General Motors has raised several financial projections for 2024 following a successful second quarter that exceeded Wall Street’s expectations. 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, targets for operating cash flow and earnings per share have also been elevated, while expectations for net income attributable to shareholders have been slightly reduced to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase from the prior year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share stood at $3.06, exceeding the anticipated $2.71 per share, and representing a 60% increase compared to 2023. Net income saw a 14% rise to $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM’s stock rose nearly 5%. The shares have increased by over 37% this year. Following the market close on Monday, GM announced a cash dividend for the third quarter, which contributed to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, and mentioned that GM is set to launch eight new or redesigned models across various sizes in North America. Barra also noted the ongoing production ramp-up for the electric Chevrolet Equinox, affirming the company’s commitment to “disciplined volume growth” amid excitement for their electric vehicles (EVs).
Earlier this month, Barra acknowledged that GM would not meet 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 remain adaptable and “build to demand,” although its EV sales increased in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving unit, will discontinue its plans for the Origin vehicle and instead focus on utilizing the next-generation Chevrolet Bolt for tests in Texas and Arizona. GM incurred a $600 million expense related to the scaling back of the Origin’s production in Detroit.
During a call with analysts, Barra explained that using the Bolt will address regulatory concerns about the Origin’s unconventional design, such as its absence of a steering wheel. This shift is expected to lower unit 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.
Moreover, GM is attempting to reorganize its joint venture in China with SAIC Motor, as it continues to face financial losses, recording a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, a drop of 50% compared to the previous year, as reported by Automotive News.