General Motors is increasing its financial projections for 2024 after exceeding Wall Street’s expectations for its second quarter results.
The Detroit-based automaker has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous forecast of $12.5 billion to $14.5 billion. Additionally, it has revised its targets for operating cash flow and earnings per share, while slightly lowering the net income outlook for shareholders to between $10 billion and $11.4 billion, down by less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a rise of over 7% year-over-year and surpassing Wall Street’s $45 billion estimate. The earnings per share stood at $3.06, exceeding the analyst forecast of $2.71 and marking a 60% increase from 2023. Net income increased by 14%, reaching $2.9 billion compared to $2.5 billion in the same period last year.
As a result of these positive figures, GM’s stock rose nearly 5% in pre-market trading Tuesday, marking an over 37% increase in stock price year-to-date. Following Monday’s trading close, GM also announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, and shared plans to launch eight new or redesigned models across various sizes in North America. She emphasized that the company is ramping up production of the electric Chevrolet Equinox and maintaining a commitment to disciplined growth in vehicle volumes despite earlier acknowledgments that GM will not meet its target of producing 1 million electric vehicles in North America by the end of 2025, mainly due to a market slowdown.
Barra also addressed developments within GM’s self-driving unit, Cruise, which had scaled back operations following an incident the previous October. The company will no longer pursue its Origin vehicle and will instead concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after a $600 million charge tied to the Origin’s halted production in Detroit.
Barra explained that transitioning to the Bolt would alleviate regulatory concerns linked to the Origin’s unconventional design, while also reducing costs and optimizing resource allocation.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra stated.
Furthermore, GM is working to restructure its joint venture with SAIC Motor in China due to ongoing losses, which included a reported $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, a 50% decline from the previous year.