General Motors is increasing its financial projections for 2024 after exceeding Wall Street expectations for the second quarter. The company has adjusted its forecast for adjusted earnings to between $13 billion and $15 billion, up from a previous range of $12.5 billion to $14.5 billion. It has also raised its targets for operating cash flow and earnings per share, while slightly lowering its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase from the previous year and surpassing Wall Street’s expectation of $45 billion. Earnings per share reached $3.06, exceeding the $2.71 analysts had predicted and representing a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
The company’s stock price saw a nearly 5% rise in pre-market trading on Tuesday, continuing a trend that has seen it climb over 37% this year. Following the close of trading on Monday, GM announced a third-quarter cash dividend, further boosting investor confidence.
In a communication to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, and mentioned the launch of eight new or redesigned models in North America. Barra stated that GM is scaling production of the electric Chevrolet Equinox and emphasized the company’s commitment to disciplined growth in electric vehicle (EV) manufacturing, despite previously stating that GM would not meet its goal of producing 1 million EVs in North America by the end of 2025 due to market slowdowns. Nonetheless, EV sales did experience growth in the last quarter.
Additionally, Barra revealed that Cruise, GM’s self-driving unit, will discontinue the Origin vehicle and focus on utilizing the next-generation Chevrolet Bolt for testing purposes in Texas and Arizona. GM incurred a $600 million charge related to the halted production of the Origin vehicle.
During a call with analysts, Barra expressed that using the Chevrolet Bolt would alleviate regulatory concerns associated with the Origin’s distinctive design. This shift is expected to reduce per-unit costs and help the company optimize its resources.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra conveyed.
Furthermore, GM is working on restructuring its joint venture with SAIC Motor in China amid ongoing losses; the company reported a loss of $104 million for the second quarter. In June, SAIC-GM reduced production by 70%, resulting in the delivery of 26,000 vehicles—50% less than the previous year, as reported by Automotive News.