General Motors has adjusted its financial outlook for 2024 following strong performance in the second quarter, exceeding Wall Street expectations.
The company has increased its anticipated adjusted earnings for the year to between $13 billion and $15 billion, an upgrade from the earlier estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share while slightly lowering expectations for net income attributable to shareholders to a range of $10 billion to $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 and surpassing Wall Street’s forecast of $45 billion. Earnings per share stood at $3.06, exceeding analysts’ estimates of $2.71, and reflecting a significant 60% growth from 2023. The company’s net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, bringing its year-to-date rise to over 37%. The company announced a third-quarter cash dividend that contributed to this stock market boost.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and revealed plans to launch eight new or redesigned models across various segments in North America. Barra emphasized the company’s commitment to disciplined growth, especially as GM ramps up production of the electric Chevrolet Equinox.
Earlier this month, Barra acknowledged that GM would likely not reach its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing the setback to a slowdown in the market. However, the company has stated it will adapt its production to match demand, with electric vehicle sales showing growth last quarter.
Barra also announced a strategic shift for Cruise, GM’s self-driving technology unit, which will abandon its Origin vehicle in favor of the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after Cruise had to scale back operations due to prior incidents. GM has recorded a $600 million charge associated with halting Origin production.
During an analyst call, Barra mentioned that using the Bolt would address regulatory concerns about the Origin’s unconventional design and help reduce costs and optimize resources.
Lastly, GM is working to restructure its joint venture with SAIC Motor in China, having experienced a $104 million loss in the second quarter. In June, production cuts at SAIC-GM were implemented, leading to a 70% decrease in output and a delivery of only 26,000 vehicles, which is 50% fewer than the previous year.