General Motors has updated its financial projections for 2024 after significantly exceeding Wall Street’s expectations in its second quarter results.
The automaker has revised its anticipated adjusted earnings for the year to range from $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to a range of $10 billion to $11.4 billion, a decrease of less than 1%.
The company’s revenue for the second quarter reached $47.9 billion, marking a rise of over 7% from the previous year and surpassing Wall Street’s expectation of $45 billion, according to FactSet. Earnings per share were reported at $3.06, exceeding analysts’ predictions of $2.71 and representing a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM’s stock surged nearly 5%. The stock has experienced a rise of more than 37% this year. Following the market close on Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter addressed to shareholders, CEO Mary Barra emphasized the successful performance of the company’s gas-powered trucks and SUVs. She detailed plans for launching eight new or redesigned vehicle models in North America. Barra also shared updates on the production of the electric Chevrolet Equinox, stressing the company’s commitment to disciplined growth despite the early success with electric vehicles.
Earlier this month, Barra acknowledged that GM would not achieve its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. She stated that the company would be adaptable and “build to demand,” although EV sales showed growth in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, will abandon its Origin vehicle after scaling back operations last October. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the suspension of Origin production in Detroit.
During a call with analysts, Barra noted that the decision to use the Bolt addresses regulators’ concerns regarding the Origin’s unconventional design, which lacked a steering wheel. The shift is also expected to reduce unit costs and improve resource allocation.
“Our vision to transform mobility using autonomous technology remains intact,” Barra stated. “Every mile traveled and each simulation brings us closer because Cruise operates as an AI-first company.”
GM is also working to restructure its joint venture in China with SAIC Motor, following a reported loss of $104 million in the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which represents a 50% decline compared to the previous year, according to Automotive News.