General Motors has increased several financial projections for 2024 after exceeding Wall Street expectations for its second quarter results.
The automaker has raised 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. It also adjusted its targets for operating cash flow and earnings per share, while net income predictions for shareholders were slightly lowered to between $10 billion and $11.4 billion.
During the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase from the previous year and surpassing the anticipated $45 billion according to FactSet estimates. Earnings per share reached $3.06, exceeding the expected $2.71, and representing a 60% increase compared to 2023. The company’s net income rose by 14% to $2.9 billion from $2.5 billion.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading and has gained more than 37% this year. The company declared a third-quarter cash dividend after trading closed on Monday, further boosting its stock performance.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gasoline-powered trucks and SUVs. She mentioned the launch of eight new or redesigned models across various segments in North America. Barra also discussed the scaling of production for the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in electric vehicle (EV) sales despite acknowledging that GM will not meet its target of producing 1 million EVs in North America by the end of 2025 due to a slowdown in the market. Nevertheless, the company reported growth in EV sales last quarter.
Additionally, Barra announced a shift in strategy for Cruise, GM’s self-driving unit, which will abandon its Origin vehicle project following an operational rollback after an incident last October. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the cessation of Origin production in Detroit.
Barra reassured analysts that using the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacks a steering wheel, while also reducing costs and optimizing resources.
“Our vision to transform mobility using autonomous technology remains unchanged, and each mile traveled brings us closer to our goals as Cruise continues to function as an AI-first company,” Barra stated.
GM is also working to restructure its joint venture with SAIC Motor in China as it faces ongoing losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering just 26,000 vehicles, a decline of 50% compared to the previous year.