General Motors has elevated its financial projections for 2024 following a strong performance that exceeded Wall Street expectations during the second quarter.
The Detroit-based automaker has updated its anticipated adjusted earnings for the year, now forecasting between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share. However, the outlook for net income attributable to shareholders has been slightly reduced 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 previous year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, significantly higher than the anticipated $2.71 per share and reflecting a growth of 60% compared to 2023. The company’s net income saw a 14% increase, totaling $2.9 billion, up from $2.5 billion.
Following the announcement, GM stock surged nearly 5% in pre-market trading on Tuesday, contributing to an overall gain of more than 37% for the year. Additionally, GM declared a third-quarter cash dividend after trading closed on Monday, further supporting the stock’s positive trajectory.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned that the company is set to launch eight new or redesigned models across compact, mid-size, and full-size categories in North America. She also informed shareholders that GM is ramping up production of the electric Chevrolet Equinox, expressing commitment to disciplined volume growth despite early successes in the EV market.
Barra previously acknowledged 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 aims to adapt by focusing production on demand, noting that EV sales did rise in the last quarter.
Moreover, the CEO announced a strategic pivot for Cruise, GM’s self-driving unit, which has faced operational challenges following an incident last October. Cruise will discontinue its Origin vehicle project and instead concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM also reported a significant $600 million charge related to the cessation of Origin production in Detroit.
In a conference call with analysts, Barra explained that utilizing the Bolt would address regulatory concerns associated with the Origin’s unconventional design, such as the absence of a steering wheel. She added that this adjustment would reduce per unit costs and enable GM to optimize resources.
Despite challenges, Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, stating that with every mile and simulation, Cruise is making progress as an AI-first company.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China amid ongoing losses, having reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, resulting in the delivery of only 26,000 vehicles, which is 50% less than the previous year, according to Automotive News.