General Motors has increased several financial projections for 2024 after exceeding Wall Street expectations in the second quarter. The Detroit automaker raised its anticipated adjusted earnings for the year to range from $13 billion to $15 billion, an increase from the prior forecast of $12.5 billion to $14.5 billion. Additionally, GM adjusted its targets for operating cash flow and earnings per share, while slightly lowering the expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, representing a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing the $45 billion expected by analysts, according to FactSet estimates. The company’s earnings per share rose to $3.06, exceeding the $2.71 forecast, and reflecting a 60% increase compared to the previous year. Net income also saw a 14% rise, totaling $2.9 billion, up from $2.5 billion.
Following the announcement, GM shares surged nearly 5% in pre-market trading on Tuesday, bringing the stock’s overall increase for the year to more than 37%. Additionally, GM declared a cash dividend for the third quarter after trading ended on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs and mentioned that the company is launching eight new or redesigned models in North America. Barra emphasized that GM is ramping up production of the electric Chevrolet Equinox, stating the commitment to disciplined growth in electric vehicle (EV) sales despite acknowledging that the company would not meet its goal of producing 1 million EVs in North America by the end of 2025 due to market slowdowns. However, GM’s EV sales increased in the last quarter.
Barra also announced a strategic shift for Cruise, GM’s self-driving division, which will no longer pursue the Origin vehicle and will instead focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM has incurred a $600 million charge related to halting production of the Origin in Detroit. During a call with analysts, Barra expressed that using the Bolt would alleviate regulatory concerns regarding the unique design of the Origin and also help reduce costs and optimize resources for GM.
The company is also working to restructure its joint venture in China with SAIC Motor, facing ongoing losses which included a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, leading to 26,000 vehicle deliveries, a 50% decline compared to the previous year, as reported by Automotive News.