General Motors has revised its financial projections for 2024 after exceeding Wall Street’s expectations for its second quarter results. The automaker now anticipates adjusted earnings between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. GM has also increased its targets for operating cash flow and earnings per share, while slightly lowering the expectation for net income attributable to shareholders to a range of $10 billion to $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing a more than 7% increase from the previous year and surpassing the $45 billion forecast by Wall Street. The earnings per share came in at $3.06, which exceeded analysts’ expectations of $2.71 per share and marked a 60% increase compared to last year. Net income rose 14%, reaching $2.9 billion, compared to $2.5 billion in the same period last year.
Following these positive results, GM’s stock increased by almost 5% in pre-market trading, with shares climbing more than 37% over the course of the year. On Monday, GM declared a cash dividend for the third quarter, contributing to the stock’s upward movement.
In a letter to shareholders, CEO Mary Barra highlighted the company’s strong performance in gas-powered trucks and SUVs and noted that GM is in the process of introducing eight new or redesigned models in North America. She emphasized the scaling of production for the electric Chevrolet Equinox, stating that while the company is excited about its electric vehicles, they remain committed to disciplined growth.
Earlier this month, Barra stated that GM would not achieve 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 plans to be flexible and adjust production according to demand, although EV sales did see an increase last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, will abandon its Origin vehicle following a previous operational setback. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This shift has also resulted in a $600 million charge for GM due to the halt in production of the Origin.
During an analyst call, Barra explained that using the Bolt addresses regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This change is expected to reduce costs per unit and enhance resource optimization.
Barra reaffirmed GM’s vision for transforming mobility through autonomous technology, emphasizing that each simulation and mile traveled brings the company closer to that goal as Cruise operates as an AI-first company.
Furthermore, GM is working to restructure its joint venture with SAIC Motor in China, as the venture continues to incur losses, with a reported loss of $104 million for the second quarter. In June, production was cut by 70%, leading to the delivery of only 26,000 vehicles, which is 50% less than the previous year.