General Motors has increased its financial projections for 2024 following a strong performance that exceeded Wall Street’s expectations in the second quarter.
The automaker has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, revised from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has adjusted its targets for operating cash flow and earnings per share. However, it slightly lowered its forecast for net income attributable to shareholders by less than 1%, now expecting between $10 billion and $11.4 billion.
The company’s revenue for the second quarter reached $47.9 billion, representing an increase of over 7% compared to the same period last year and surpassing the $45 billion forecast from analysts. Earnings per share stood at $3.06, exceeding the analyst expectation of $2.71 and marking a 60% rise from 2023. Net income climbed 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has seen an increase of over 37% since the beginning of the year. After the market closed on Monday, GM announced a third-quarter cash dividend, contributing to the stock price surge.
In a shareholder letter, CEO Mary Barra highlighted the success of the company’s gasoline-powered trucks and SUVs, mentioning ongoing plans to introduce eight new or redesigned vehicle models in North America. She also discussed the ramp-up of electric Chevrolet Equinox production, indicating a commitment to careful growth in electric vehicle volume.
Earlier in the month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this setback to a market slowdown. Despite this, the company noted growth in its EV sales last quarter and stated it would adapt production to meet demand.
Barra announced that Cruise, GM’s autonomous vehicle unit, would no longer pursue its Origin vehicle model after scaled-back operations due to an incident last October. Instead, Cruise aims to utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million expense tied to halting Origin production in Detroit.
During an analyst call, Barra remarked that using the Bolt would address regulatory concerns over the unique design of the Origin, such as its absence of a steering wheel. This shift is expected to reduce costs per unit and enhance GM’s resource allocation.
“Our vision to transform mobility with autonomous technology remains intact,” Barra stated. “Every mile traveled and every simulation brings us closer to our goals as Cruise continues to operate as an AI-focused company.”
Additionally, GM is working on restructuring its joint venture with SAIC Motor in China as it faces losses, reporting a $104 million loss for the second quarter. In June, the joint venture significantly reduced production by 70%, delivering 26,000 vehicles, which is 50% lower than in the previous year.