General Motors is adjusting its financial projections for 2024 following a strong performance that exceeded Wall Street expectations in the second quarter.
The Detroit-based automaker has increased its anticipated adjusted earnings range for the year to between $13 billion and $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly lowering its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing the Wall Street forecast of $45 billion, according to FactSet. Earnings per share stood at $3.06, exceeding the expected $2.71 by analysts and demonstrating a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion in the prior year.
Following these results, GM’s stock price surged nearly 5% in pre-market trading, contributing to a more than 37% increase in stock value this year. Additionally, GM announced a cash dividend for the third quarter, which further boosted investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of its gas-powered trucks and SUVs and mentioned the launch of eight new or redesigned models in North America. She also discussed the ramp-up in production of the electric Chevrolet Equinox, stating that while the company is enthusiastic about its electric vehicles, it remains committed to careful volume growth.
Despite their optimism, Barra noted earlier this month that GM would 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. However, the company plans to adapt by building according to demand, and its EV sales did see growth in the last quarter.
Barra also revealed that Cruise, GM’s self-driving unit, would discontinue the development of its Origin vehicle following a setback in operations last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million expense related to the stoppage of Origin production in Detroit.
During an analysts’ call, Barra explained that using the Bolt would address regulatory concerns associated with the Origin’s distinctive design, which notably lacks a steering wheel. This change is expected to reduce costs per unit and optimize resources.
“Our vision to transform mobility using autonomous technology remains unchanged. Every mile traveled and every simulation brings us closer, as Cruise operates as an AI-first company,” Barra stated.
Additionally, GM is working on restructuring its joint venture in China with SAIC Motor due to ongoing financial losses, having reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, which represents a 50% decrease compared to the same period last year, according to Automotive News.