General Motors has adjusted its financial outlook for 2024 following a strong performance in the second quarter that exceeded Wall Street predictions. The automaker has raised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, moving up from its previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has increased 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, a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year, and surpassing the anticipated $45 billion according to FactSet estimates. The earnings per share were $3.06, exceeding the $2.71 forecast by analysts, and reflecting a 60% increase from 2023. Net income rose by 14% to $2.9 billion, compared to $2.5 billion in the previous year.
Following the announcement, GM’s stock experienced a nearly 5% increase in pre-market trading, contributing to an overall rise of more than 37% for the year. The company also declared a third-quarter cash dividend after the market closed on Monday, which positively affected stock performance.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of GM’s gas-powered trucks and SUVs, and indicated that the company is set to launch eight new or redesigned models in North America. She emphasized the focused growth strategy for the electric Chevrolet Equinox, stating that GM is committed to “disciplined volume growth,” despite earlier acknowledging that the company would not reach its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns. However, GM’s electric vehicle sales did experience growth in the last quarter.
Barra also announced changes for Cruise, GM’s self-driving division, which has faced setbacks in its operations. The company will discontinue its Origin vehicle and will instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona, while absorbing a $600 million charge from halting Origin production.
In response to regulatory concerns about the Origin’s unique features, such as the absence of a steering wheel, Barra noted that using the Bolt will address these issues. This shift is expected to reduce per-unit costs and enable GM to better manage its resources.
Lastly, GM is looking to restructure its joint venture with SAIC Motor in China amid financial losses, having recorded a $104 million loss for the second quarter. Production cuts by SAIC-GM included a reduction of 70%, resulting in 26,000 vehicle deliveries, a 50% decline from the previous year, as reported by Automotive News.