General Motors has raised several of its financial projections for 2024, following a strong performance that exceeded Wall Street’s expectations for its second quarter.
The automaker has adjusted its forecast for 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 raised its targets for operating cash flow and earnings per share. Meanwhile, expectations for net income attributable to shareholders were slightly adjusted downwards, now projected to be between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, up over 7% from the previous year and surpassing analysts’ expectations of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding the anticipated $2.71 and marking a 60% increase from 2023. Net income rose by 14% to $2.9 billion, compared to $2.5 billion previously.
Following the announcements, GM’s stock rose nearly 5% in pre-market trading, contributing to a more than 37% increase in its value this year. Additionally, GM declared a cash dividend for the third quarter after the market closed on Monday, further enhancing investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and noted the planned launch of eight new or redesigned models in North America. She also mentioned that GM is ramping up production of the electric Chevrolet Equinox, emphasizing a measured approach to growth in the electric vehicle sector.
However, Barra acknowledged earlier this month that GM would not achieve its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company intends to remain flexible and produce vehicles based on demand, although EV sales did see an increase in the last quarter.
In other news, Barra announced that Cruise, GM’s autonomous driving division, will discontinue its Origin vehicle, which had faced operational setbacks after an incident last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt as it continues testing in Texas and Arizona. A $600 million charge was incurred due to the halt in production of the Origin in Detroit.
During a conference call with analysts, Barra indicated that the switch to the Bolt would address regulatory concerns regarding the unique design of the Origin, including its absence of a steering wheel. This decision is expected to reduce costs per unit and allow GM to optimize its resources.
Barra reiterated the company’s commitment to transforming mobility through autonomous technology, stating that each mile traveled and every simulation gets Cruise closer to its goals. Additionally, GM is working to restructure its joint venture in China with SAIC Motor, which has been facing financial losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is a 50% drop compared to the previous year.