General Motors is adjusting its financial projections for 2024 after exceeding expectations in its second-quarter performance.
The Detroit-based automaker has increased its forecast for adjusted earnings to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. It has also raised its expectations for operating cash flow and earnings per share, although it slightly reduced the net income estimate for 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 increase of over 7% from the same period last year and surpassing Wall Street’s consensus of $45 billion. Earnings per share reached $3.06, exceeding the anticipated $2.71 and showing a 60% increase from 2023. The company’s net income rose 14% to $2.9 billion, compared to $2.5 billion in the previous year.
GM’s stock rose nearly 5% in pre-market trading following the announcement. This year, the stock has appreciated over 37%. Additionally, GM declared a cash dividend for the third quarter, further boosting investor confidence.
CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs in a letter to shareholders. She also mentioned the launch of eight new or redesigned models in North America and the scaling up of production for the electric Chevrolet Equinox. Barra emphasized the company’s commitment to disciplined growth, despite recent comments that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown.
Furthermore, Barra announced changes for Cruise, GM’s autonomous vehicle division. The company will discontinue its Origin vehicle, previously subject to operational halts after an incident last October, and will instead focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This shift aims to address regulatory concerns regarding the unique design of the Origin and will help reduce costs.
“Our vision to transform mobility using autonomous technology is unchanged,” Barra stated, emphasizing Cruise’s commitment to AI-driven solutions.
GM is also working to restructure its joint venture in China with SAIC Motor, amid financial losses; the company reported a loss of $104 million in the second quarter. Production cuts in June led to a significant drop in vehicle deliveries, with SAIC-GM delivering 26,000 vehicles, which is half of what it delivered in the same period last year.