General Motors is adjusting its financial projections for 2024 after exceeding Wall Street’s expectations for its second quarter performance.
The Detroit-based automaker has raised its forecast for adjusted earnings this year to between $13 billion and $15 billion, an increase from its previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has elevated its targets for operating cash flow and earnings per share, while slightly reducing its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase year-over-year and surpassing Wall Street’s expectation of $45 billion, according to estimates from FactSet. The company posted earnings per share of $3.06, above the expected $2.71, and representing a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion in the same period last year.
Following this report, GM’s stock rose nearly 5% in pre-market trading on Tuesday, with the stock climbing over 37% in 2023. Additionally, GM announced a third-quarter cash dividend after the trading session closed on Monday, contributing further to the stock’s positive momentum.
In a message to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She disclosed plans for the launch of eight new or redesigned models in North America. Barra also stated that GM is ramping up production of the electric Chevrolet Equinox, emphasizing their commitment to disciplined volume growth alongside their interest in electric vehicles.
However, Barra recently 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 slowdown in the market. The company has expressed a flexible approach to production, focusing on building according to demand, although its electric vehicle sales did see growth last quarter.
Moreover, Barra announced that Cruise, GM’s autonomous vehicle division, would abandon its Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a previous setback in operations. GM recorded a $600 million charge related to the suspension of Origin production in Detroit.
During an analyst call, Barra mentioned that switching to the Bolt would address regulatory concerns associated with the Origin’s unique design, such as the absence of a steering wheel. This transition is expected to reduce costs per unit and optimize GM’s resources.
“Our vision to transform mobility using autonomous technology remains steadfast, and with each mile and simulation, we are getting closer to our goals, as Cruise is fundamentally an AI-first company,” Barra stated.
Additionally, GM is working to revamp its joint venture in China with SAIC Motor in light of ongoing losses, which included a $104 million loss for the second quarter. In June, production at SAIC-GM was cut by 70%, leading to a delivery of just 26,000 vehicles, a 50% decrease from the previous year, according to Automotive News.