General Motors has increased its financial projections for 2024 after exceeding Wall Street expectations in its second quarter results. The Detroit-based automaker raised its anticipated 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 adjusted its targets for operating cash flow and earnings per share, although the forecast for net income attributable to shareholders has been slightly decreased by less than 1% to a range of $10 billion to $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase compared to the same period last year and surpassing the $45 billion that analysts expected, according to FactSet estimates. The company’s earnings per share stood at $3.06, significantly above the anticipated $2.71 and 60% higher than in 2023. The net income rose 14% to $2.9 billion compared to $2.5 billion in the previous year.
As a result of these strong figures, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to an overall increase of more than 37% in stock value this year. Following the market closure on Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gasoline-powered trucks and SUVs and mentioned plans for launching eight new or redesigned models in North America. She also stated that GM is ramping up production of the electric Chevrolet Equinox, expressing commitment to disciplined volume growth despite earlier remarks indicating that the company would not reach its target of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns.
Barra announced a shift in strategy for GM’s autonomous vehicle division, Cruise. The company will discontinue the development of its Origin vehicle and instead focus on deploying the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM has incurred a $600 million charge associated with the cessation of Origin production in Detroit. This change is expected to address regulatory concerns about the Origin’s unconventional design, such as the absence of a steering wheel, while also reducing costs and optimizing resources.
During a call with analysts, Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, emphasizing that each mile and simulation brings the company closer to its goals. Additionally, GM is seeking to restructure its joint venture in China with SAIC Motor, as it continues to face losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, which is 50% less than the previous year.