General Motors has updated its financial projections for 2024 following a strong performance in the second quarter that exceeded Wall Street’s expectations.
The Detroit-based automaker revised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, a rise from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM increased its targets for operating cash flow and earnings per share, while slightly reducing 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 compared to the same period last year and surpassing Wall Street’s forecast of $45 billion. Earnings per share reached $3.06, exceeding analysts’ expectations of $2.71 and marking a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
As a result of these positive figures, GM’s stock surged nearly 5% in pre-market trading on Tuesday, and the stock has experienced a 37% increase this year. On Monday, GM also announced a cash dividend for the third quarter, contributing to the stock’s rise.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She mentioned the company’s plans to launch eight new or redesigned models in North America. Barra also discussed the ramp-up of production for the electric Chevrolet Equinox, emphasizing a commitment to measured growth in electric vehicle (EV) production.
Earlier in the month, Barra acknowledged that GM would not achieve its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. Nevertheless, the company intends to adjust production in response to demand, with EV sales showing growth last quarter.
In addition, Barra announced a strategic shift for Cruise, GM’s self-driving subsidiary, which will discontinue plans for its Origin vehicle. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM recorded a $600 million charge related to the cancellation of the Origin’s production in Detroit.
During a call with analysts, Barra stated that using the Bolt will address regulatory concerns regarding the unique design of the Origin, which notably lacks a steering wheel. This decision is expected to reduce costs per unit and help optimize resources.
“Our vision to transform mobility using autonomous technology remains unchanged,” Barra said, noting that every experience with their technology is a step toward progress as Cruise continues to advance as an AI-driven company.
GM is also working to restructure its joint venture with SAIC Motor in China, where it has been facing losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, which is 50% lower than the same time last year.