General Motors has updated its financial projections for 2024 after exceeding analysts’ expectations for its second quarter earnings.
The automaker has increased its anticipated adjusted earnings this year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. It has also raised its targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders has been slightly decreased by less than 1%, now estimated to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, reflecting over a 7% increase from the same period last year, surpassing the Wall Street expectation of $45 billion. Earnings per share reached $3.06, exceeding the anticipated $2.71, and marking a 60% increase from 2023. Net income grew to $2.9 billion, a 14% rise from $2.5 billion.
GM’s stock rose nearly 5% in pre-market trading on Tuesday, and it has increased by over 37% this year. Following the market closure on Monday, GM declared a third-quarter cash dividend that further boosted shareholder confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She announced the introduction of eight new or redesigned vehicle models in North America, including an emphasis on increasing production of the electric Chevrolet Equinox. Barra stated that while the company is enthusiastic about its electric vehicles, it is committed to careful volume growth.
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 due to market conditions. Nevertheless, the company has reported growth in its EV sales last quarter.
Additionally, Barra revealed that Cruise, GM’s self-driving division that had previously halted operations after an incident last October, will abandon its Origin vehicle project. Instead, Cruise will concentrate on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to stopping Origin production in Detroit.
During a conference call with analysts, Barra noted that using the Bolt will address regulatory concerns about the Origin’s unconventional design, which lacked a steering wheel. This shift is expected to reduce unit costs and help GM allocate its resources more efficiently.
Barra maintained that GM’s goal of transforming mobility through autonomous technology remains steadfast, with each mile and simulation contributing to their progress as an AI-driven company.
Furthermore, GM is restructuring its joint venture with SAIC Motor in China as it continues to face losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% less than the previous year, as per reports.