General Motors has adjusted its financial projections for 2024 following a strong second-quarter performance that surpassed Wall Street’s expectations. The automaker has raised its anticipated adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. GM has also adjusted its targets for operating cash flow and earnings per share, although it slightly decreased its forecast for net income attributable to shareholders to a range of $10 billion to $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, which is over a 7% increase from the previous year and above analysts’ expectations of $45 billion, according to FactSet estimates. The company’s earnings per share reached $3.06, surpassing the expected $2.71 and reflecting a 60% increase compared to 2023. Net income saw a 14% rise to $2.9 billion, up from $2.5 billion.
In pre-market trading, GM’s stock rose nearly 5%, contributing to an overall gain of more than 37% this year. Following the market close on Monday, GM also declared a third-quarter cash dividend, boosting investor interest.
In a communication to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gasoline-powered trucks and SUVs. She mentioned that the company is launching eight new or redesigned models across various categories in North America and is ramping up the production of the electric Chevrolet Equinox. Barra emphasized that while the company is enthusiastic about its electric vehicles and their early success, it remains committed to prudent growth.
However, Barra acknowledged that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. GM has indicated its willingness to adapt by “building to demand,” though it reported an increase in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, will discontinue the Origin vehicle model following operational setbacks last October. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM had recorded a $600 million charge related to the halted production of the Origin in Detroit.
During a conference call with analysts, Barra pointed out that employing the Bolt would address regulatory concerns regarding the distinctive design of the Origin, which lacks a steering wheel. This shift is expected to reduce costs per unit and optimize resources.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, stating that each mileage and simulation brings them closer to their goals as Cruise operates as an AI-first company.
Furthermore, GM is working to restructure its joint venture with SAIC Motor in China, where it has incurred losses. In the second quarter, GM reported a loss of $104 million from this venture, and in June, SAIC-GM significantly cut production by 70%, delivering 26,000 vehicles, which is 50% less than the previous year.