General Motors is adjusting several financial projections for 2024 after exceeding Wall Street’s expectations for its second quarter performance. The Detroit-based automaker revised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion, while also increasing its targets for operating cash flow and earnings per share. However, the expectation for net income attributable to shareholders was slightly reduced by less than 1%, now forecasted to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, which marks a more than 7% increase from the same period last year and surpasses the $45 billion anticipated by analysts, according to FactSet estimates. Earnings per share reached $3.06, exceeding the $2.71 per share projected by analysts and representing a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result of these strong figures, GM’s stock rose nearly 5% in pre-market trading on Tuesday, reflecting an overall increase of more than 37% for the year. Following the market close on Monday, GM announced a cash dividend for the third quarter, providing additional support for its stock value.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, noting plans to launch eight new or redesigned compact, mid-size, and full-size models in North America. She indicated that the company is increasing the production of the electric Chevrolet Equinox and emphasized a commitment to disciplined volume growth despite the excitement surrounding electric vehicles (EVs).
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, attributing this to a slowdown in the market. The company has stated it will adapt by “building to demand,” though EV sales did see an increase last quarter.
Barra also revealed that Cruise, GM’s self-driving division which had to scale back operations after an incident last October, would discontinue its Origin vehicle. Instead, the focus will shift to utilizing the next-generation Chevrolet Bolt as the company conducts vehicle testing in Texas and Arizona. GM incurred a $600 million expense related to the production halt of the Origin in Detroit.
During a conference call with analysts, Barra stated that using the Bolt should alleviate regulatory concerns regarding the Origin’s unconventional design, which lacked a steering wheel. She further mentioned that this decision would help reduce costs per unit and enable better resource optimization.
“Our vision to transform mobility using autonomous technology remains unchanged, and every mile traveled, along with every simulation, brings us closer to realizing that vision because Cruise is an AI-first company,” Barra affirmed.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, as the company continues to face losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, resulting in 26,000 vehicle deliveries, which marked a 50% decrease from the previous year.