General Motors has raised several financial projections for 2024 after exceeding Wall Street’s expectations in its second quarter results.
The automaker now anticipates adjusted earnings for the year to be between $13 billion and $15 billion, an increase from previous estimates of $12.5 billion to $14.5 billion. It has also updated 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, a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase compared to the same period last year and exceeding Wall Street’s forecast of $45 billion, based on FactSet estimates. Earnings per share reached $3.06, surpassing the projected $2.71, and showed a 60% increase over the previous year. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has risen more than 37% so far this year. The company also declared a cash dividend for the third quarter following Monday’s market close, further contributing to its stock performance.
In her letter to shareholders, CEO Mary Barra highlighted the strong performance of its gas-powered trucks and SUVs and noted that GM is preparing to launch eight new or redesigned models in North America. She discussed the scaling up of production for the electric Chevrolet Equinox and emphasized the company’s commitment to disciplined growth in electric vehicle (EV) production, despite acknowledging a market slowdown that will prevent GM from achieving its target of producing 1 million EVs in North America by the end of 2025.
Barra also announced that Cruise, GM’s self-driving division, will abandon its plans for the Origin vehicle, focusing instead on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This pivot comes after Cruise faced operational setbacks following an incident last October and GM incurred a $600 million charge related to the Origin’s halted production.
During an analysts’ call, Barra indicated that using the Bolt would address regulators’ concerns regarding the unique design of the Origin, which lacks a traditional steering wheel. She added that this change would help reduce per-unit costs and optimize resources.
Moreover, GM is working to restructure its joint venture in China with SAIC Motor, as the company continues to experience losses, with a reported loss of $104 million for the second quarter. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, a 50% decrease compared to the previous year.