General Motors (GM) has increased several financial projections for 2024 after exceeding Wall Street’s expectations in its second quarter results.
The Detroit-based automaker has raised its forecasted adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has updated its targets for operating cash flow and earnings per share. However, it slightly reduced its expectations for net income attributable to shareholders by less than 1%, now predicting it to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase from the same period last year, surpassing the anticipated $45 billion according to FactSet estimates. Earnings per share reached $3.06, exceeding the expected $2.71 per share from analysts and showing a 60% increase compared to 2023. 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, contributing to a year-to-date increase of more than 37%. After the market closed on Monday, GM announced a cash dividend for the third quarter, further boosting investor sentiment.
In a letter to shareholders, CEO Mary Barra emphasized the company’s strong performance in the gas-powered truck and SUV segments and noted that GM is launching eight new or revamped models across various sizes in North America. She also mentioned scaling production for the electric Chevrolet Equinox and expressed commitment to disciplined growth despite excitement around electric vehicles (EVs).
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million EVs in North America by the end of 2025, attributing the delay to a market slowdown. The company aims to be agile and produce vehicles based on demand, although EV sales increased last quarter.
Additionally, Barra shared that GM’s self-driving unit, Cruise, will discontinue the Origin vehicle, which faced challenges after an incident last October. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the halt in Origin production in Detroit.
In discussions with analysts, Barra stated that using the Bolt will address regulatory concerns associated with the Origin’s unconventional design, such as its lack of a steering wheel. This shift is expected to reduce costs per unit and enable GM to better allocate resources.
GM is also working to restructure its joint venture in China with SAIC Motor as the company continues to face losses, recording a $104 million loss in the second quarter. Production was significantly cut by SAIC-GM in June, with deliveries falling by 50% compared to the previous year, according to Automotive News.