General Motors is adjusting its financial outlook for 2024 following strong performance in the second quarter, surpassing expectations set by Wall Street.
The automaker has raised its projected adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous range of $12.5 billion to $14.5 billion. Additionally, GM has increased its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, which is a more than 7% increase from the same period last year and above analyst expectations of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, surpassing the anticipated $2.71 and representing a 60% increase compared to 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
In response to these results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to an overall increase of more than 37% for the year. Following market close on Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs in a letter to shareholders, noting that the company is set to launch eight new or redesigned models across various categories in North America. She also emphasized the scaling production of the electric Chevrolet Equinox, reiterating GM’s commitment to disciplined growth in electric vehicle (EV) production, despite acknowledging that the company’s goal of producing 1 million EVs in North America by the end of 2025 will not be met due to market slowdowns. However, Barra pointed out that EV sales did experience growth in the last quarter.
In a noteworthy pivot, Barra announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle project and instead concentrate on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a production halt for the Origin in Detroit, resulting in a $600 million charge for the company. Barra stated that this shift would alleviate regulatory concerns regarding the unique design of the Origin, including its absence of a steering wheel, and would also reduce per-unit costs.
“Our vision to transform mobility using autonomous technology is unchanged,” Barra said, emphasizing Cruise’s commitment to AI-driven advancements in transportation.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China amid ongoing financial losses, having reported a $104 million loss in the second quarter. In June, SAIC-GM cut production by 70%, leading to a delivery of 26,000 vehicles, which is 50% less than the previous year, as reported by Automotive News.