General Motors has increased several financial projections for 2024 after exceeding Wall Street’s expectations for its second-quarter performance. The Detroit-based automaker has revised its anticipated adjusted earnings for the year to between $13 billion and $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Operating cash flow and earnings per share targets have also been raised, while expectations for net income attributable to shareholders saw a slight decrease of less than 1%, now projected between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% compared to the same period last year, surpassing Wall Street’s expectation of $45 billion as per FactSet estimates. The company’s earnings per share reached $3.06, exceeding the anticipated $2.71 and showing a 60% growth compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM shares surged almost 5% in pre-market trading, with the stock having increased more than 37% this year. After market close on Monday, GM also declared a third-quarter cash dividend, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She noted the company is launching eight new or redesigned models across various segments in North America and emphasized the scaling of production for the electric Chevrolet Equinox. Barra expressed cautious optimism about electric vehicles, stating that while GM is excited about early successes, it remains committed to disciplined growth.
Earlier this month, Barra acknowledged that GM would not meet its target of producing one million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company has opted to adapt its production to align with demand, even as its EV sales grew last quarter.
Additionally, Barra announced changes within Cruise, GM’s autonomous vehicle unit, which recently scaled back operations following a previous incident. Cruise will abandon its Origin vehicle and focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona, after GM incurred a $600 million charge due to the Origin’s halted production in Detroit.
During a call with analysts, Barra stated that the decision to utilize the Bolt addresses regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This shift is expected to lower unit costs and improve resource optimization.
Barra also reiterated GM’s commitment to transforming mobility through autonomous technology, emphasizing the importance of every mile traveled and simulation conducted as part of Cruise’s AI-first approach.
Finally, GM is working on restructuring its joint venture with SAIC Motor in China, as it continues to face losses. The company suffered a $104 million loss in the second quarter, with SAIC-GM reducing production by 70% and delivering 26,000 vehicles, which is 50% fewer than the same period last year, according to Automotive News.