General Motors has increased several financial projections for 2024 after exceeding Wall Street expectations for its second-quarter performance.
The Detroit-based automaker revised its anticipated adjusted earnings for the year to between $13 billion and $15 billion, a rise from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM raised its targets for operating cash flow and earnings per share. However, expectations for net income attributable to shareholders were decreased slightly, now projected between $10 billion and $11.4 billion, a reduction of less than 1%.
In the second quarter, GM’s revenue reached $47.9 billion, reflecting a more than 7% increase from the previous year and surpassing the $45 billion anticipated by analysts. Earnings per share were recorded at $3.06, significantly higher than the expected $2.71 and 60% greater than a year prior. Net income also rose by 14%, reaching $2.9 billion compared to $2.5 billion.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading, and the shares have increased over 37% this year. The company also declared a third-quarter cash dividend after market close on Monday, which contributed to the stock’s positive momentum.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs and noted that the company is launching eight new or redesigned compact, mid-size, and full-size models in North America. She emphasized GM’s commitment to scaling up production of the electric Chevrolet Equinox, stating that while the company is excited about its electric vehicles, it remains committed to disciplined growth.
Earlier this month, Barra mentioned that GM would not achieve its goal of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market. The company intends to be flexible and “build to demand,” although its EV sales did see growth in the last quarter.
Furthermore, Barra announced that GM’s self-driving unit, Cruise, will abandon its plans for the Origin vehicle, which faced operational setbacks last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt as it conducts testing in Texas and Arizona. This move is expected to reduce costs per unit and help optimize resources, as the company took a $600 million charge related to halting the Origin’s production.
Barra reaffirmed GM’s vision to innovate mobility through autonomous technology, stating, “Every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company.”
Additionally, GM is working on restructuring its joint venture in China with SAIC Motor, as it continues to face losses, recording a $104 million loss for the second quarter. Earlier in June, production at SAIC-GM was reduced by 70%, resulting in the delivery of 26,000 vehicles, which is 50% less than the same period last year, according to reports.