General Motors has updated its financial projections for 2024 following impressive results that exceeded analysts’ expectations for the second quarter. The automaker now anticipates its adjusted earnings for the year will be between $13 billion and $15 billion, a notable increase from the previous estimate of $12.5 billion to $14.5 billion. GM has also lifted its targets for operating cash flow and earnings per share, while slightly adjusting the net income forecast attributable to shareholders downwards by less than 1%, now projected to be between $10 billion and $11.4 billion.
During the second quarter, GM’s revenue surged to $47.9 billion, reflecting a more than 7% rise compared to the same period last year, and exceeding Wall Street’s expectations of $45 billion according to FactSet data. Earnings per share stood at $3.06, surpassing the anticipated $2.71 and marking a 60% increase over 2023. Additionally, net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Following these strong results, GM’s stock experienced a nearly 5% increase in pre-market trading on Tuesday and has seen a 37% rise since the beginning of the year. On the last trading day before the announcement, GM also declared 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 gas-powered trucks and SUVs, noting plans to launch eight new or redesigned models across compact, mid-size, and full-size categories in North America. She also addressed advancements in the production of the electric Chevrolet Equinox, stating, “While we are excited about our EVs and early successes, we remain committed to disciplined volume growth.”
However, Barra acknowledged earlier this month that GM will 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 has expressed its intention to remain flexible and respond to demand, although EV sales did see growth last quarter.
In another significant development, Barra announced that Cruise, GM’s self-driving division, will discontinue its plans for the Origin vehicle and will instead use the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a necessary rollback of operations due to an incident last October. GM incurred a $600 million expense related to the cessation of the Origin’s production in Detroit.
During a call with analysts, Barra commented that utilizing the Bolt would address regulatory concerns regarding the Origin’s unconventional design, which lacked a steering wheel. This strategic shift is also expected to reduce costs per unit and optimize resource allocation.
Barra reaffirmed GM’s commitment to reshaping mobility through autonomous technology, emphasizing that with each mile traveled and every simulation, the company moves closer to its goals, noting that Cruise operates as an AI-first entity.
Additionally, GM is working on restructuring its joint venture with SAIC Motor in China, where it continues to report losses, including a $104 million loss in the second quarter. In June, production cuts at SAIC-GM reached 70%, with only 26,000 vehicles delivered, a 50% drop from the previous year, according to Automotive News.