General Motors has elevated its financial projections for 2024 following impressive performance in the second quarter that exceeded Wall Street’s forecasts.
The Detroit-based automaker has increased 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. Furthermore, GM has revised its targets for operating cash flow and earnings per share. However, expectations for net income attributable to shareholders were slightly adjusted downwards, now estimated to be between $10 billion and $11.4 billion—a decrease of less than 1%.
In the second quarter, GM’s revenue reached $47.9 billion, marking a more than 7% increase from the previous year and surpassing analysts’ expectations of $45 billion, based on FactSet data. The company reported earnings per share of $3.06, exceeding the $2.71 per share forecasted by analysts and reflecting a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, compared to $2.5 billion in the same period last year.
Following this news, GM’s stock surged nearly 5% in pre-market trading on Tuesday, with the stock having risen over 37% since the start of the year. GM also declared a third-quarter cash dividend after the market closed on Monday.
In a message to shareholders, CEO Mary Barra highlighted the success of the company’s gasoline-powered trucks and SUVs, announcing plans to launch eight new or redesigned models in North America. She also shared that GM is ramping up production of the electric Chevrolet Equinox, stating the company is committed to disciplined growth in its electric vehicle segment.
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market. However, she emphasized GM’s flexibility to adapt production based on demand, while noting that electric vehicle sales showed growth in the last quarter.
Additionally, the CEO revealed that Cruise, GM’s self-driving division, will be discontinuing its Origin vehicle after previously scaling back operations last October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the discontinuation of the Origin production in Detroit.
During a discussion with analysts, Barra indicated that leveraging the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacked a traditional steering wheel. She also mentioned that this shift would help reduce per-unit costs and optimize the company’s resources.
“Our vision to transform mobility using autonomous technology is unchanged,” Barra said. “Every mile traveled and every simulation brings us closer, as Cruise is an AI-first company.”
In addition, GM is working to restructure its joint venture in China with SAIC Motor due to ongoing losses; the company reported a loss of $104 million for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, which is 50% lower than the previous year, as reported by Automotive News.