General Motors has increased several financial projections for 2024 following impressive results that exceeded expectations in its second quarter. The Detroit-based automaker revised 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. Additionally, it raised its targets for operating cash flow and earnings per share, while slightly lowering its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting an increase of over 7% from the previous year and surpassing Wall Street’s forecast of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding the $2.71 estimated by analysts and marking a 60% increase from the same period in 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has seen a rise of more than 37% this year. After the market closed on Monday, GM also announced a cash dividend for the third quarter, contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the company’s success with its gasoline-powered trucks and SUVs, mentioning plans to launch eight new or redesigned models in North America. She also indicated that GM is ramping up production of the electric Chevrolet Equinox, stating the company is excited about its electric vehicles but remains committed to disciplined 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, attributing this to a slowdown in the market. The company stated it would adapt production to align with demand, although EV sales did see an increase last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle following a pause in operations due to an incident last October. Instead, Cruise will concentrate on the next-generation Chevrolet Bolt while conducting tests in Texas and Arizona. GM incurred a $600 million charge related to the discontinuation of Origin production in Detroit.
During a call with analysts, Barra noted that utilizing the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacks a steering wheel. This shift will also help reduce costs per unit and optimize 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 emphasized in her statement.
Furthermore, GM is working on restructuring its joint venture in China with SAIC Motor, which continues to face financial challenges. The company reported a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, resulting in the delivery of 26,000 vehicles, which is 50% fewer than the previous year, as noted by Automotive News.