General Motors is elevating its financial projections for 2024 after exceeding Wall Street’s expectations in the second quarter.
The automaker has raised its anticipated adjusted earnings for the year to between $13 billion and $15 billion, an increase from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has enhanced its targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders has been slightly decreased by less than 1%, now expected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, which marks a more than 7% increase from the previous year and surpasses Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share were reported at $3.06, exceeding the anticipated $2.71, and reflecting a 60% increase over the previous year. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following this announcement, GM’s stock surged nearly 5% in pre-market trading on Tuesday, and it has gained over 37% this year. The company also declared a third-quarter cash dividend, contributing to the stock’s positive momentum.
In communication with shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned plans to launch eight new or redesigned models in North America. She also addressed the scaling up of production for the electric Chevrolet Equinox, emphasizing the importance of disciplined volume growth despite the excitement surrounding their electric vehicles.
Earlier this month, Barra noted that GM would not meet its objective of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns. Nonetheless, the company reported an increase in EV sales last quarter and stated its flexibility to “build to demand.”
Additionally, Barra indicated that Cruise, GM’s self-driving unit, has decided to abandon its Origin vehicle plan and will shift focus to using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This shift comes after a $600 million charge related to the halt of Origin production in Detroit. During a discussion with analysts, Barra highlighted that the transition to the Bolt will address regulatory concerns linked to Origin’s unique design, such as its absence of a steering wheel, while also reducing costs and optimizing resources.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation gets us closer because Cruise is an AI-first company,” she stated.
Lastly, GM is working on restructuring its joint venture with SAIC Motor in China, as it continues to face losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, which is 50% less than the previous year.