General Motors is increasing several financial projections for 2024 after significantly exceeding Wall Street’s expectations for its second quarter results.
The Detroit-based automaker has raised its forecasted adjusted earnings for the year to a range between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, targets for operating cash flow and earnings per share have also been adjusted upward, while the outlook for net income attributable to shareholders has been slightly reduced to between $10 billion and $11.4 billion, down by less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year and surpassing the anticipated $45 billion as per FactSet estimates. Earnings per share stood at $3.06, exceeding analysts’ expectations of $2.71 per share and reflecting a 60% increase from 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading. The stock has risen over 37% this year, and after the market closed on Monday, GM declared a third-quarter cash dividend, further boosting its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the company’s success with gas-powered trucks and SUVs and mentioned plans to launch eight new or redesigned models in North America. She also pointed out GM’s commitment to scaling production of the electric Chevrolet Equinox, emphasizing disciplined volume growth alongside enthusiasm for electric vehicles (EVs).
However, Barra had previously indicated that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company plans to adjust its production based on demand, although EV sales did experience growth in the last quarter.
Barra also announced a strategic shift for Cruise, GM’s self-driving division, which will discontinue its Origin vehicle after scaling back operations due to a prior incident. Instead, Cruise will focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona, leading to a $600 million charge linked to the Origin’s halted production in Detroit.
During a call with analysts, Barra mentioned that using the Bolt would address regulatory concerns regarding the Origin’s unique design, including its absence of a steering wheel. This change is expected to reduce unit costs and help GM better allocate resources.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, stating, “Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation brings us closer because Cruise is an AI-first company.”
Additionally, GM aims to restructure its joint venture with SAIC Motor in China, as the company faces ongoing losses, including a $104 million loss reported for the second quarter. Earlier in June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% less than the previous year, according to reports.