General Motors has adjusted its financial outlook for 2024 after exceeding analysts’ expectations for the second quarter. The automaker now anticipates adjusted earnings between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. It has also raised its targets for operating cash flow and earnings per share, although it slightly lowered the expected net income for shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, surpassing Wall Street’s expectations of $45 billion, and reflecting over a 7% increase from the prior year. Earnings per share reached $3.06, significantly higher than the anticipated $2.71 and 60% greater than the same period in 2023. Net income increased by 14%, totaling $2.9 billion compared to $2.5 billion last year.
Following these strong results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to a year-to-date increase of over 37%. Additionally, GM declared a cash dividend for the third quarter after trading closed on Monday.
In her letter to shareholders, CEO Mary Barra emphasized the strong performance of GM’s gas-powered trucks and SUVs and highlighted plans to launch eight new or redesigned models in North America. She indicated that production ramp-up for the electric Chevrolet Equinox is underway, stating a commitment to disciplined growth despite previous remarks about not meeting the goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns.
Barra also announced a shift in strategy for Cruise, GM’s self-driving unit, which will discontinue the Origin vehicle and instead focus on utilizing the next-generation Chevrolet Bolt for vehicle tests in Texas and Arizona. This change comes after a $600 million charge related to the halted production of the Origin.
In regard to Cruise, Barra reassured stakeholders that the vision to transform mobility through autonomous technology remains intact, emphasizing that each simulation and mile contributes to their objectives.
Lastly, GM continues to face challenges with its joint venture in China with SAIC Motor, reporting a loss of $104 million in the second quarter as production was reduced by 70%, delivering 26,000 vehicles, which is 50% less than the previous year.