General Motors has updated its financial projections for 2024 following a strong performance that exceeded Wall Street forecasts for the second quarter.
The Detroit-based auto manufacturer has raised its anticipated adjusted earnings for the year to a range between $13 billion and $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. It also increased its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders by less than 1%, now projected to be between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase from the previous year and surpassing Wall Street’s expectation of $45 billion, as per FactSet estimates. The company’s earnings per share reached $3.06, higher than the $2.71 expected by analysts and marking a 60% increase from 2023. Net income rose by 14% to $2.9 billion, compared to $2.5 billion last year.
In pre-market trading on Tuesday, GM shares jumped nearly 5%, contributing to an overall rise of more than 37% in stock value this year. Following market closure on Monday, GM also declared a cash dividend for the third quarter, which positively impacted the stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s traditional gas-powered trucks and SUVs, announcing plans to launch eight new or redesigned models in North America. She also mentioned the ramp-up in production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined volume growth while expressing excitement about its electric vehicle (EV) initiatives.
Earlier this month, Barra acknowledged that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, citing a market slowdown. The company has indicated its intention to build according to demand, although it experienced growth in EV sales last quarter.
Additionally, Barra disclosed that Cruise, GM’s self-driving technology division, would discontinue its Origin vehicle following a previous incident that led to a reduction in operations. Instead, Cruise will focus on utilizing a next-generation Chevrolet Bolt for testing its vehicles in Texas and Arizona. This decision follows a $600 million write-off related to the discontinuation of the Origin’s production in Detroit.
During a conference call with analysts, Barra noted that deploying the Bolt is designed to address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This shift is expected to reduce costs and enhance resource optimization.
“Our vision to transform mobility using autonomous technology remains unchanged,” Barra stated. “Every mile traveled and simulation brings us closer because Cruise is an AI-first company.”
GM is also in the process of restructuring its joint venture in China with SAIC Motor, following losses, including a reported $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, half the amount of the previous year, according to Automotive News.