General Motors is raising its financial projections for 2024 after exceeding Wall Street predictions for its second-quarter performance.
The automaker has increased its expected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share. However, it slightly lowered its outlook for net income attributable to shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
For 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 expectations of $45 billion, as per FactSet estimates. The company’s earnings per share reached $3.06, exceeding the anticipated $2.71, and reflecting a 60% growth from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM stock rose nearly 5% in pre-market trading. The stock has experienced a more than 37% increase this year. On Monday, GM declared a cash dividend for the third quarter, contributing to this boost in stock value.
In a letter to shareholders, CEO Mary Barra emphasized the success of GM’s gas-powered trucks and SUVs, noting ongoing efforts to launch eight new or redesigned compact, mid-size, and full-size models in North America. She also highlighted the scaling production of the electric Chevrolet Equinox, stating that the company is eager about its electric vehicles while also committing to disciplined growth in production volume.
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a market slowdown. The company has expressed intentions to adjust production to align with demand, despite an increase in EV sales in the last quarter.
Barra also shared that Cruise, GM’s self-driving unit, will abandon its Origin vehicle and will instead focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a production halt related to the Origin. GM incurred a $600 million charge due to this disruption in Detroit.
During an analyst call, Barra stated that employing the Bolt would alleviate regulatory concerns regarding Origin’s unique design, such as its absence of a steering wheel. This shift is expected to reduce costs per unit and optimize resources for GM.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, noting that each milestone brings Cruise closer to its goals as it continues to function as an AI-first company.
Moreover, GM is working to restructure its joint venture in China with SAIC Motor, as the partnership has been facing losses, including a reported $104 million loss in the second quarter. In June, production at SAIC-GM was cut by 70%, leading to a delivery of 26,000 vehicles, a 50% decline compared to the previous year.