General Motors has adjusted its financial outlook for 2024 following a strong second quarter that exceeded Wall Street’s expectations. The Detroit automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, operating cash flow and earnings per share targets have also been raised, although expectations for net income attributable to shareholders have been slightly lowered to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, which marks a more than 7% increase year-over-year and surpassed the anticipated $45 billion projected by analysts. The company reported earnings per share of $3.06, exceeding the expected $2.71 and representing a 60% increase compared to last year. Net income rose 14% to $2.9 billion, compared to $2.5 billion in the previous year.
In pre-market trading on Tuesday, GM’s stock surged nearly 5%. The shares have increased over 37% in value this year. Following the close of trading on Monday, GM also announced a third-quarter cash dividend, contributing to the stock’s positive performance.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She revealed that the company is set to launch eight new or redesigned models across compact, mid-size, and full-size categories in North America. Barra also mentioned that GM is ramping up production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined volume growth despite earlier setbacks in meeting its electric vehicle production targets.
Barra acknowledged that GM is unlikely to achieve its goal of producing one million electric vehicles in North America by the end of 2025 due to market conditions, but reiterated that the company plans to adapt by producing vehicles based on demand, with EV sales having increased in the last quarter.
Furthermore, Barra announced a strategic shift for Cruise, GM’s self-driving unit, which will discontinue its Origin vehicle following previous operational setbacks. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million expense connected to the discontinuation of the Origin model.
During a call with analysts, Barra stated that utilizing the Bolt would address regulatory concerns related to the Origin’s distinctive design, such as its absence of a steering wheel. This adjustment is also expected to lower costs per unit and enhance resource optimization.
“Our vision to transform mobility using autonomous technology remains intact,” Barra affirmed, emphasizing that each mile traveled and simulation brings Cruise closer to its goals as an AI-focused company.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, as it continues to face financial losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced its production by 70% and delivered 26,000 vehicles, representing a 50% decline from the previous year.