General Motors has elevated its financial projections for 2024 after exceeding Wall Street’s expectations in its second-quarter performance.
The automaker has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the prior estimate of $12.5 billion to $14.5 billion. Additionally, it has raised its targets for operating cash flow and earnings per share. The forecast for net income attributable to shareholders was slightly reduced by less than 1%, now estimated between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing Wall Street’s expectations of $45 billion, as per FactSet estimates. Earnings per share reached $3.06, exceeding analyst projections of $2.71, and showing a 60% rise compared to 2023. Net income also grew by 14%, rising to $2.9 billion from $2.5 billion.
Following the announcement, GM’s stock surged nearly 5% in pre-market trading, reflecting a more than 37% increase year-to-date. The company declared a third-quarter cash dividend after trading closed on Monday, further boosting the stock’s appeal.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, stating that the company is set to launch eight new or redesigned compact, mid-size, and full-size models in North America. She emphasized GM’s commitment to disciplined growth in electric vehicle production, particularly with the upcoming electric Chevrolet Equinox. However, Barra noted that GM may miss its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in market demand.
Additionally, Barra announced a shift in strategy for GM’s self-driving unit, Cruise, which previously had to scale back operations after an incident last October. Cruise has decided to abandon its Origin vehicle and will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the discontinuation of the Origin’s production in Detroit.
During a conference call with analysts, Barra stated that this new direction would address any regulatory concerns regarding the Origin’s unconventional design, which lacks a steering wheel. The adjustment aims to reduce costs per unit and better allocate resources.
“Our vision to transform mobility using autonomous technology remains steadfast,” Barra asserted, noting that every mile driven and every simulation brings Cruise closer to its goals as an AI-centered company.
On another front, GM is working to restructure its joint venture in China with SAIC Motor, as it continues to face losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM slashed production by 70%, delivering only 26,000 vehicles, which is a 50% decline compared to the previous year.