General Motors has updated its financial projections for 2024 after exceeding Wall Street’s expectations in its second quarter results. The automaker has increased 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. Additionally, GM has raised its targets for operating cash flow and earnings per share, although it slightly decreased the expectations for net income attributable to shareholders by less than 1%, now forecasting between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% from the previous year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. The earnings per share stood at $3.06, which was higher than the anticipated $2.71 and represents a 60% increase compared to 2023. Net income improved by 14%, amounting to $2.9 billion, up from $2.5 billion.
Consequently, GM’s stock surged nearly 5% in pre-market trading, with shares having risen more than 37% this year. Following the closure of trading on Monday, GM announced a third-quarter cash dividend, which contributed to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of its gas-powered trucks and SUVs, mentioning the company’s plans to launch eight new or redesigned models in North America. She also addressed the production scaling of the electric Chevrolet Equinox, affirming the company’s commitment to disciplined growth in volume, despite earlier comments indicating that GM may not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to market challenges. However, EV sales saw an uptick in the last quarter.
Furthermore, Barra disclosed that Cruise, GM’s self-driving division, would discontinue its Origin vehicle, opting instead to focus on employing the next-generation Chevrolet Bolt for testing in Texas and Arizona. The decision to halt Origin production in Detroit has resulted in a $600 million charge for GM.
Barra assured analysts that utilizing the Bolt would address regulatory concerns surrounding the Origin’s unconventional design, particularly its absence of a steering wheel. This shift is expected to reduce costs per unit and enhance resource optimization.
“Our vision to transform mobility using autonomous technology remains steadfast,” Barra stated, emphasizing that every mile and simulation advances Cruise’s position as an AI-first company.
Additionally, GM is restructuring its joint venture with SAIC Motor in China to address ongoing financial losses, which amounted to $104 million in the second quarter. In June, SAIC-GM significantly reduced production by 70%, resulting in the delivery of 26,000 vehicles, reflecting a 50% decline compared to the prior year, as reported by Automotive News.