General Motors (GM) has made significant adjustments to its financial outlook for 2024 following a strong performance in the second quarter that exceeded Wall Street’s estimates. The Detroit-based automaker has updated its projected adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has elevated its targets for operating cash flow and earnings per share while slightly adjusting its expectations for net income attributable to shareholders to a range between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a 7% increase from the previous year and surpassing Wall Street’s anticipated figure of $45 billion, according to estimates from FactSet. The company’s earnings per share reached $3.06, exceeding the expected $2.71 by analysts and representing a notable 60% increase compared to 2023. Net income also saw a rise of 14%, climbing to $2.9 billion, up from $2.5 billion.
In response to these favorable results, GM’s stock price rose nearly 5% in pre-market trading, with an overall increase of over 37% for the year. After the close of trading on Monday, GM announced a cash dividend for the third quarter, further contributing to its stock’s positive momentum.
CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs in her letter to shareholders, revealing plans for the launch of eight new or redesigned models in North America. She also commented on the company’s ongoing efforts to scale production of the electric Chevrolet Equinox, emphasizing a commitment to disciplined volume growth despite earlier statements indicating that GM may fall short of its goal to produce 1 million electric vehicles in North America by the end of 2025 due to a market slowdown.
In a strategic shift regarding its autonomous vehicle efforts, Barra announced that Cruise, GM’s self-driving unit, will discontinue development of its Origin model in favor of utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows past challenges faced by Cruise, including a temporary reduction in operations after an incident last October. GM incurred a $600 million charge due to the halt in Origin production in Detroit. Barra expressed confidence in Cruise’s vision for transforming mobility through autonomous technology, emphasizing the company’s commitment to innovation.
Additionally, GM is working on restructuring its joint venture with SAIC Motor in China, as it continues to experience financial losses, including a reported $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70% compared to the previous year, leading to a delivery of just 26,000 vehicles.
Overall, GM’s strong quarterly performance not only demonstrates resilience in a challenging automotive market but also signifies the company’s strategic efforts toward future growth in electric and autonomous vehicle production. As GM navigates through these transitions, stakeholders are encouraged by the potential for innovation and adaptation.