General Motors has raised its financial projections for 2024 after exceeding Wall Street’s expectations in its second quarter results. The Detroit-based automaker has adjusted its expected adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has updated its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking an over 7% increase compared to the same period last year, and surpassing the $45 billion anticipated by analysts. Earnings per share were recorded at $3.06, which is higher than the expected $2.71 and represents a 60% increase from 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
Following this announcement, GM’s stock jumped nearly 5% in pre-market trading on Tuesday, contributing to a year-to-date gain of over 37%. The company also declared a cash dividend for the third quarter after Monday’s trading close, boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the company’s success with its gas-powered trucks and SUVs, and mentioned plans to launch eight new or redesigned models across various sizes in North America. She stated that GM is ramping up production of the electric Chevrolet Equinox, emphasizing a commitment to disciplined volume growth.
However, Barra acknowledged earlier this month that GM will not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown, noting that the company will adapt by “building to demand,” even as EV sales grew last quarter.
Barra also revealed that Cruise, GM’s self-driving division, will discontinue its Origin vehicle after a previous incident led to a reduction in operations. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM had to take a $600 million charge related to stopping the production of the Origin in Detroit.
During a discussion with analysts, Barra explained that using the Bolt would address regulatory concerns over the design of the Origin, which notably lacked a steering wheel. She added that this pivot would help reduce costs per unit and optimize resource allocation.
Lastly, GM is also working to restructure its joint venture with SAIC Motor in China, as the company continues to face losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, resulting in the delivery of only 26,000 vehicles, which is 50% lower than the prior year.