General Motors is adjusting its financial projections for 2024 after exceeding analyst expectations in its second quarter results. The automaker has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. It has also raised its targets for operating cash flow and earnings per share. The expectation for net income attributable to shareholders saw a slight decrease of less than 1%, now projected between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, representing over a 7% rise from the previous year and surpassing Wall Street’s forecast of $45 billion. Earnings per share stood at $3.06, exceeding the anticipated $2.71 and marking a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these developments, GM shares rose nearly 5% in pre-market trading on Tuesday, bringing their total increase for the year to more than 37%. Additionally, GM announced a third-quarter cash dividend after market close on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the company’s successful gas-powered trucks and SUVs and mentioned plans to launch eight new or redesigned vehicle models in North America. She emphasized GM’s commitment to disciplined growth in electric vehicle (EV) production, particularly for the electric Chevrolet Equinox. Despite earlier goals of producing 1 million EVs in North America by the end of 2025, Barra acknowledged that the company would not meet this target due to a market slowdown but reaffirmed a focus on producing according to demand, while EV sales saw an increase in the last quarter.
Barra also discussed the future of Cruise, GM’s self-driving unit, which is discontinuing its Origin vehicle following a reduction in operations after an incident last October. Instead, Cruise will focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge tied to the halted production of the Origin in Detroit.
During a recent call with analysts, Barra noted that switching to the Bolt would address concerns from regulators regarding the Origin’s design, which lacked a steering wheel. This shift is expected to reduce costs and allow GM to make better use of its resources.
“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.
Furthermore, GM is working to reorganize its joint venture in China with SAIC Motor, as it faces losses, reporting a $104 million shortfall for the second quarter. Production was significantly cut in June, with SAIC-GM reducing output by 70% and delivering 26,000 vehicles, down 50% from the previous year, according to Automotive News.