General Motors has raised its financial projections for 2024 following a strong performance in the second quarter that exceeded Wall Street estimates.
The Detroit-based automaker upgraded its forecast for adjusted earnings 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 raised its expectations for operating cash flow and earnings per share. However, it slightly lowered its forecast for net income attributable to shareholders, now expected to be between $10 billion and $11.4 billion, a decrease of less than 1%.
For the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% from the prior year and surpassing the anticipated figure of $45 billion, according to estimates from FactSet. Earnings per share reached $3.06, exceeding the $2.71 projected by analysts and representing a 60% rise compared to 2023. The company’s net income rose by 14%, totaling $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM’s stock surged nearly 5%. The stock has risen more than 37% year-to-date. After the market closed on Monday, GM also announced a cash dividend for the third quarter, further boosting investor confidence.
In a communication to shareholders, CEO Mary Barra highlighted the strong sales of the company’s gas-powered trucks and SUVs, indicating that GM is set to launch eight new or redesigned models across different sizes in North America. She also discussed the scaling up of production for the electric Chevrolet Equinox, emphasizing GM’s commitment to controlled growth in its electric vehicle (EV) segment.
However, Barra previously acknowledged that GM would not meet its goal of producing 1 million EVs in North America by the end of 2025 due to a slowdown in the market. The automaker indicated a flexible production strategy, aiming to “build to demand,” although EV sales did see an increase in the last quarter.
Additionally, the CEO announced that GM’s self-driving division, Cruise, will discontinue the development of its Origin vehicle, refocusing efforts on the next-generation Chevrolet Bolt for testing in Texas and Arizona. This strategic shift follows a $600 million charge related to halting production of the Origin in Detroit.
During a call with analysts, Barra noted that using the Bolt would address regulatory concerns about the Origin’s distinctive design, which lacks a steering wheel. This decision is also expected to reduce costs and enable better resource management.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, stating that “every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company.”
Lastly, GM is actively working to restructure its joint venture in China with SAIC Motor, which has resulted in significant losses. The company recorded a $104 million loss in the second quarter, with SAIC-GM reporting a 70% reduction in production and delivering 26,000 vehicles, down 50% compared to the previous year, as noted by Automotive News.