General Motors has raised several financial projections for 2024 after exceeding Wall Street’s expectations in the second quarter. The Detroit-based automaker has upgraded its forecast for adjusted earnings to a range of $13 billion to $15 billion, previously estimated at $12.5 billion to $14.5 billion. It has also increased 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.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase from the previous year and surpassing Wall Street’s expectation of $45 billion, as per FactSet. Earnings per share reached $3.06, which is higher than the anticipated $2.71 and represents a 60% increase compared to 2023. The net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following the earnings report, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has gained over 37% this year. Additionally, GM announced a cash dividend for the third quarter, positively impacting the stock price.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, while announcing the upcoming launch of eight new or redesigned models in North America. She emphasized that GM is ramping up production of the electric Chevrolet Equinox and expressed the company’s commitment to disciplined volume growth as it enters the electric vehicle market.
Earlier in the month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown, but indicated that EV sales had increased in the last quarter.
Barra also revealed that Cruise, GM’s self-driving division, would no longer pursue its Origin vehicle and would shift focus to using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the halt in production of the Origin in Detroit.
During a conference call, Barra stated that utilizing the Bolt would address regulatory concerns related to the Origin’s unconventional design and reduce costs, ultimately optimizing resources for GM.
The automaker is also working to restructure its joint venture in China with SAIC Motor, which has been operating at a loss; in the second quarter alone, GM reported a $104 million loss in this venture. SAIC-GM reduced production by 70% in June, delivering 26,000 vehicles, a decline of 50% compared to the previous year.