General Motors is upping its financial projections for 2024 after exceeding Wall Street’s expectations during the second quarter.
The automaker now expects adjusted earnings for the year to be between $13 billion and $15 billion, an increase from the prior forecast of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly lowering its net income expectations for shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase compared to the previous year and surpassing Wall Street’s anticipated $45 billion, as per FactSet estimates. Earnings per share reached $3.06, which is higher than the expected $2.71 per share and reflects a 60% rise from 2023. Net income climbed 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, and it has surged more than 37% since the beginning of the year. Additionally, GM announced a third-quarter cash dividend, contributing to the stock’s positive performance.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of the company’s gas-powered trucks and SUVs and mentioned plans to introduce eight new or redesigned models in North America. She also addressed the scaling production of the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined volume growth in the electric vehicle sector, despite previously indicating that the company would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown.
Barra also confirmed the decision by Cruise, GM’s self-driving division, to discontinue the Origin vehicle following an incident last year. The focus will shift to utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a $600 million charge related to the stoppage of Origin production in Detroit. Barra noted that switching to the Bolt addresses regulatory concerns regarding the Origin’s unique design, which lacks a traditional steering wheel. This strategic move is expected to reduce costs and optimize resources.
“Our vision to transform mobility using autonomous technology is unchanged,” Barra stated, emphasizing that each test and simulation brings Cruise closer to its goal as an AI-first company.
In addition, GM is looking to restructure its joint venture in China with SAIC Motor, as it continues to report losses. The company incurred a $104 million loss in the second quarter, while SAIC-GM significantly reduced production by 70% in June, delivering only 26,000 vehicles, which is half of what was delivered a year earlier.