General Motors (GM) has updated its financial outlook for 2024, raising several targets after surpassing Wall Street’s expectations in its second quarter performance. The automaker projects adjusted earnings for the year to be between $13 billion and $15 billion, an increase from previous estimates of $12.5 billion to $14.5 billion. While its expectations for net income attributable to shareholders have been slightly lowered to between $10 billion and $11.4 billion, this represents a modest decline of less than 1%.
The company’s revenue for the second quarter reached $47.9 billion, marking an impressive 7% year-over-year increase and exceeding Wall Street predictions of $45 billion. Additionally, GM’s earnings per share came in at $3.06, which is significantly above the anticipated $2.71, and a 60% increase compared to 2023. Net income rose by 14%, reaching $2.9 billion, compared to $2.5 billion from the previous year.
Following these results, GM shares surged nearly 5% in pre-market trading, contributing to a year-to-date rise of over 37%. The company announced a third-quarter cash dividend, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, mentioning the upcoming launch of eight new or redesigned vehicle models in North America. Barra also discussed the ongoing production ramp-up of the electric Chevrolet Equinox, while maintaining a focus on disciplined growth in the electric vehicle (EV) segment. However, she acknowledged that GM would not meet its previous goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in market demand. Despite this, EV sales showed improvement in the last quarter.
In a shift regarding its autonomous vehicle strategy, GM’s Cruise unit will discontinue the Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after Cruise faced operational challenges following an incident last year. The move is expected to alleviate regulatory concerns related to the Origin’s unconventional design and will help in reducing production costs.
Additionally, GM is navigating challenges with its joint venture in China with SAIC Motor, which reported a loss of $104 million in the second quarter. Production was significantly cut back, with deliveries falling by 50% year-over-year.
Overall, GM’s strong financial performance in the second quarter and its proactive measures for future growth showcase the company’s resilience and adaptability in a competitive automotive landscape. With a commitment to both gas-powered and electric vehicles, GM is positioning itself to capture a larger share of the evolving market.
For those following the automotive industry, GM’s focus on balancing traditional and electric vehicle offerings could signify a positive outlook as consumer preferences continue to shift towards sustainable mobility solutions.