General Motors is adjusting several financial projections for 2024 following a robust performance that exceeded Wall Street’s expectations for the second quarter.
The automaker has increased its expected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous forecast of $12.5 billion to $14.5 billion. They also raised targets for operating cash flow and earnings per share, while slightly reducing the outlook for net income attributable to shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
In the second quarter, GM reported revenues of $47.9 billion, representing over a 7% increase compared to the same period last year and surpassing Wall Street’s $45 billion estimate. Earnings per share reached $3.06, exceeding the anticipated $2.71 and marking a 60% rise from the previous year. 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 the stock having increased by more than 37% throughout the year. Additionally, the company declared a third-quarter cash dividend after market close on Monday, contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs and mentioned the company’s plans to launch eight new or redesigned models in North America. She also talked about ramping up production of the electric Chevrolet Equinox, emphasizing that while they are enthusiastic about electric vehicles (EVs) and early accomplishments, the company is dedicated to disciplined volume growth.
Barra previously indicated that GM would not reach its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing the setback to a slowdown in the market. The company has expressed its intention to remain adaptable and “build to demand,” although EV sales did see an increase last quarter.
Furthermore, Barra revealed that Cruise, GM’s self-driving division which had to retract its operations following a previous incident, will discontinue the production of its Origin vehicle. Instead, Cruise will focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This shift has led GM to incur a $600 million charge related to stopping production of the Origin in Detroit.
During a call with analysts, Barra stated that utilizing the Bolt would address regulatory concerns surrounding the unique design of the Origin, particularly its lack of a steering wheel. She mentioned that this change would also reduce costs per unit and help optimize GM’s resources.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled and every simulation brings us closer because Cruise is an AI-first company,” Barra asserted in her statement.
Additionally, GM is looking to restructure its joint venture in China with SAIC Motor due to ongoing financial losses; the company reported a $104 million loss for the second quarter. In June, the SAIC-GM partnership cut production by 70% and delivered 26,000 vehicles, down 50% compared to the previous year, according to Automotive News.