General Motors has raised several financial projections for 2024 after exceeding Wall Street’s expectations for its second-quarter performance.
The Detroit-based automaker has increased its adjusted earnings forecast for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion, while also raising targets for operating cash flow and earnings per share. The outlook for net income attributable to shareholders has been revised down slightly by less than 1%, now estimated to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase year-on-year and surpassing Wall Street’s anticipated $45 billion, according to FactSet. Earnings per share reached $3.06, exceeding the analyst expectation of $2.71 and representing a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following this news, GM’s stock climbed nearly 5% in pre-market trading on Tuesday, bringing its total increase to more than 37% this year. The company also announced a third-quarter cash dividend after market hours on Monday, which further enhanced its stock performance.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of GM’s gasoline-powered trucks and SUVs. She noted that the company is planning to launch eight new or redesigned models across compact, mid-size, and full-size categories in North America. Barra also mentioned that GM is ramping up production of the electric Chevrolet Equinox and emphasized the company’s commitment to “disciplined volume growth” in its electric vehicle (EV) segment, even as she acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to market conditions.
Additionally, Barra announced that Cruise, GM’s autonomous driving division, will discontinue its Origin vehicle project and instead focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona, following production issues that led to a $600 million charge related to the halted Origin production in Detroit.
During an analysts’ call, Barra discussed how using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, eliminating issues such as the absence of a steering wheel. This shift is expected to reduce costs and streamline GM’s resources.
Furthermore, GM is looking to restructure its joint venture with SAIC Motor in China amid ongoing losses, reported at $104 million for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, a drop of 50% compared to the same time last year.