General Motors is raising its financial projections for 2024 following a strong performance that exceeded Wall Street’s expectations for the second quarter. The Detroit-based automaker has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, adjusting up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has set new targets for operating cash flow and earnings per share, although it slightly lowered the expectations 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 revenue of $47.9 billion, marking an impressive increase of more than 7% compared to the same period last year and surpassing Wall Street’s projections of $45 billion. The company’s earnings per share were recorded at $3.06, beating analysts’ expectations of $2.71 per share and reflecting a 60% increase year-on-year. Net income also rose by 14% to $2.9 billion, compared to $2.5 billion in 2023.
Following these positive results, GM’s stock surged nearly 5% in pre-market trading, having increased over 37% this year. The company also announced a third-quarter cash dividend shortly after Monday’s trading closed, further boosting investor confidence.
CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs in her letter to shareholders, while also noting that the company is launching eight new or redesigned vehicle models across various sizes in North America. While electric vehicle production remains a focus, Barra acknowledged the company would fall short of its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. However, she emphasized a commitment to “build to demand,” as EV sales did see growth over the last quarter.
In a significant shift for GM’s self-driving unit, Cruise, Barra announced the discontinuation of the Origin vehicle, which had faced regulatory concerns. Instead, Cruise will pivot toward utilizing the next-generation Chevrolet Bolt for autonomous vehicle testing in Texas and Arizona. The change is expected to reduce costs per unit and manage resources more effectively.
Barra remains optimistic about the potential for autonomous technology, stating that each mile traveled and simulation completed continues to move Cruise closer to its vision. Despite some challenges in its China joint venture with SAIC Motor, which suffered a $104 million loss in the second quarter, GM appears committed to adapting its strategies to ensure sustained growth.
This positive outlook on GM’s performance and innovations is encouraging, demonstrating not only resilience in the automotive market but a commitment to evolving technologies and addressing consumer demands.
In summary, GM’s financial success reflects its strategic initiatives in product development and electric vehicle expansion, while the company’s adaptability in the face of challenges showcases a proactive approach to future growth and innovation.