General Motors has increased several financial projections for 2024 following a strong performance that exceeded Wall Street expectations in the second quarter.
The automaker has revised its outlook for adjusted earnings to a range of $13 billion to $15 billion, improving from previous estimates of $12.5 billion to $14.5 billion. Additionally, targets for operating cash flow and earnings per share have also been raised, while net income expectations for shareholders have been slightly downgraded by less than 1%, now anticipated to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing over a 7% increase from the same period last year and surpassing Wall Street’s forecast of $45 billion, according to estimates from FactSet. Earnings per share reached $3.06, exceeding the expected $2.71 and showing a 60% improvement from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock rose nearly 5% in pre-market trading on Tuesday, with shares climbing over 37% this year. After the market closed on Monday, GM also declared a cash dividend for the third quarter, which further boosted share prices.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of the company’s gas-powered trucks and SUVs, noting that GM is in the process of launching eight new or redesigned models across various sizes in North America. She also emphasized that GM is ramping up production of the electric Chevrolet Equinox, stating that while the company is enthusiastic about electric vehicles (EVs), it remains committed to disciplined growth in production.
Earlier this month, Barra acknowledged 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 plans to remain flexible and “build to demand,” despite a growth in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division that had to scale back operations after an incident last October, would discontinue its Origin vehicle. Instead, the company will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM took a $600 million charge related to ceasing production of the Origin in Detroit.
During a conference call with analysts, Barra stated that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, which lacks a steering wheel. This change is also expected to reduce costs per unit and allow GM to optimize resources.
“Our vision to transform mobility using autonomous technology remains unchanged, and each mile traveled, along with every simulation, brings us closer to our goals,” said Barra in her statement.
Furthermore, GM is endeavoring to reorganize its joint venture in China with SAIC Motor as it continues to face financial difficulties, having reported a $104 million loss for the second quarter. In June, SAIC-GM reduced its production by 70%, resulting in deliveries of 26,000 vehicles, which is 50% lower than the previous year, according to Automotive News.