General Motors has increased its financial projections for 2024 after exceeding Wall Street’s expectations for its second quarter results.
The Detroit-based automotive company has revised its expected adjusted earnings for the year to a range of $13 billion to $15 billion, compared to the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has lifted its expectations for operating cash flow and earnings per share, while slightly lowering its forecast 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, marking a more than 7% increase from the previous year and surpassing the Wall Street estimate of $45 billion. The company’s earnings per share stood at $3.06, exceeding analysts’ expectations of $2.71 and showing a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion in the same period last year.
Following this announcement, GM’s stock surged nearly 5% in pre-market trading, with an overall increase of more than 37% for the year. The company also declared a third-quarter cash dividend after the market closed on Monday, contributing to the stock’s rise.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, noting the company is set to launch eight new or redesigned models in North America. She emphasized the importance of disciplined volume growth as GM scales production of the electric Chevrolet Equinox.
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. She emphasized the company’s commitment to building vehicles based on demand, despite the growth in EV sales last quarter.
Additionally, Barra announced changes to Cruise, GM’s self-driving subsidiary, which will discontinue its Origin vehicle following a rollback in operations after an incident last October. Instead, Cruise will utilize the next-generation Chevrolet Bolt for tests in Texas and Arizona, as GM incurred a $600 million charge related to the halt in Origin production.
Barra reflected on the shift, noting that using the Bolt would address regulatory concerns about the Origin’s unconventional design and help optimize resources by lowering costs per unit.
GM is also restructuring its joint venture with SAIC Motor in China, where it is facing financial losses. The company reported a $104 million loss in the second quarter, coinciding with a 70% reduction in production by SAIC-GM, which delivered 26,000 vehicles, a 50% decrease compared to the same period the year before.