General Motors has enhanced its financial projections for 2024 after exceeding Wall Street expectations during the second quarter. The Detroit-based automaker has adjusted its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. GM also increased its targets for operating cash flow and earnings per share, while slightly lowering its expectations for net income attributable to shareholders by less than 1% to a range of $10 billion to $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% from the previous year and surpassing the expected $45 billion, based on FactSet estimates. Earnings per share reached $3.06, exceeding analysts’ expectations of $2.71 and reflecting a 60% increase compared to 2023. Net income showed a 14% rise to $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM shares rose nearly 5%, following a 37% increase over the year. The company also declared a third-quarter cash dividend after Monday’s market close, contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of its traditional gas-powered trucks and SUVs, while announcing plans for the launch of eight new or updated models across various sizes in North America. Barra emphasized GM’s commitment to scaling the production of the electric Chevrolet Equinox but acknowledged a setback in the company’s goal of manufacturing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. However, she mentioned that EV sales had seen growth in the last quarter.
In addition, Barra revealed that GM’s self-driving division, Cruise, which had to scale back operations following an incident last October, will discontinue its Origin vehicle. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge associated with halting Origin production in Detroit.
During an analysts’ call, Barra stated that shifting to the Bolt would alleviate regulatory concerns regarding the unique design of the Origin, which lacked a conventional steering wheel. This change is expected to reduce per unit costs and enable better resource optimization.
Barra affirmed that GM’s goal to revolutionize mobility through autonomous technology remains steadfast, noting that each mile and simulation is a step closer to that vision as Cruise operates as an AI-focused company.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor amid ongoing losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which represents a 50% decrease compared to the previous year, according to Automotive News.