General Motors has elevated its financial projections for 2024 after exceeding Wall Street’s expectations in its second-quarter results.
The Detroit-based automaker increased its anticipated adjusted earnings to a range of $13 billion to $15 billion, up from a previous expectation of $12.5 billion to $14.5 billion. It also raised its targets for both operating cash flow and earnings per share. However, expectations for net income attributable to shareholders were slightly reduced by less than 1%, now anticipated to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, showing an increase of over 7% compared to the previous year and surpassing the Wall Street expectation of $45 billion. Earnings per share reached $3.06, exceeding the analysts’ forecast of $2.71 per share and representing a 60% increase from 2023. Net income rose by 14%, reaching $2.9 billion, compared to $2.5 billion last year.
Following these results, GM’s stock saw a nearly 5% rise in pre-market trading on Tuesday, and it has gained over 37% since the beginning of the year. The company also announced a third-quarter cash dividend after the markets closed on Monday, contributing to the stock’s surge.
In a letter to shareholders, CEO Mary Barra highlighted the success of its gasoline-powered trucks and SUVs, while also outlining plans to launch eight new or redesigned models across compact, mid-size, and full-size categories in North America. She confirmed that GM is ramping up production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined volume growth in the electric vehicle sector, despite earlier statements indicating that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns. Nevertheless, EV sales did see an increase in the last quarter.
Barra announced changes regarding Cruise, GM’s self-driving unit, which has faced setbacks since a prior incident last October. The company has decided to discontinue its Origin vehicle and will pivot to using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the cessation of Origin production in Detroit.
During a conference call with analysts, Barra stated that adopting the Bolt would address regulatory concerns about the Origin’s unconventional design, including its lack of a steering wheel. This transition is also expected to reduce costs per unit and allow GM to better allocate resources.
Barra reiterated the company’s ongoing commitment to transforming mobility through autonomous technology, remarking that each mile traveled and each simulation brings them closer to achieving that vision.
Additionally, GM is in the process of restructuring its joint venture in China with SAIC Motor, following ongoing losses; the company recorded a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, which is a drop of 50% compared to the previous year.