General Motors has raised several financial projections for 2024 after significantly exceeding Wall Street expectations during its second quarter.
The Detroit-based automaker has adjusted its projected adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous range of $12.5 billion to $14.5 billion. It has also raised its targets for operating cash flow and earnings per share, although it slightly reduced its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM achieved revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year and surpassing the $45 billion forecast by analysts. Earnings per share were reported at $3.06, exceeding expectations of $2.71 and representing a 60% rise from 2023. The company’s net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Following the financial report, GM’s stock surged nearly 5% in pre-market trading. The stock has increased more than 37% this year, and after market hours on Monday, GM announced a third-quarter cash dividend, further boosting its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She mentioned that the company is launching eight new or redesigned models across various segments in North America and emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox. Barra stated, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Earlier this month, Barra indicated that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market downturn. The company plans to remain flexible and “build to demand,” though EV sales did see growth in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle following an operational rollback after an incident last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM has incurred a $600 million charge related to ceasing production of the Origin in Detroit.
During an analyst call, Barra explained that the decision to use the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This change is aimed at reducing costs per unit and optimizing resources.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra stated.
Furthermore, GM is working to restructure its joint venture in China with SAIC Motor, as it continues to face losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is a 50% decline compared to the previous year.