General Motors has revised its financial outlook for 2024 after reporting impressive second-quarter results that exceeded Wall Street projections.
The Detroit-based automaker has increased its expected adjusted earnings for 2024 to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. GM also raised its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
The company reported second-quarter revenue of $47.9 billion, marking over a 7% increase compared to the same period last year and surpassing the expected $45 billion according to FactSet estimates. Earnings per share reached $3.06, exceeding the analyst expectation of $2.71 and reflecting a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
In response to the strong performance, GM’s stock rose nearly 5% in pre-market trading on Tuesday, continuing its upward trend with a more than 37% increase this year. After the market closed on Monday, GM declared a third-quarter cash dividend, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, and mentioned that the company is preparing to launch eight new or redesigned models in North America. She emphasized GM’s commitment to disciplined growth in the production of the electric Chevrolet Equinox, stating their enthusiasm for electric vehicles while acknowledging the need for a careful approach.
Earlier this month, Barra admitted that GM will not meet its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. Despite this, the company reported growth in EV sales last quarter and plans to adapt production based on demand.
Barra also announced a strategic shift for Cruise, GM’s autonomous driving unit, which will discontinue its Origin vehicle due to operational setbacks. Instead, Cruise will leverage the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM recorded a $600 million charge related to the suspension of Origin production.
Barra reiterated GM’s vision for transforming mobility through autonomous technology, assuring that the focus remains on progress with Cruise as an AI-centered company.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, where it has faced ongoing losses, reporting a $104 million loss in the second quarter. Production was significantly cut in June, with SAIC-GM delivering 26,000 vehicles, a 50% decline from the previous year, according to Automotive News.