General Motors has adjusted its financial projections for 2024 upwards after surpassing Wall Street’s expectations in the second quarter. The Detroit-based automaker now anticipates adjusted earnings between $13 billion and $15 billion, an increase from its previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its operational cash flow and earnings per share targets, although it slightly lowered its net income forecast attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing Wall Street’s expected $45 billion, according to FactSet. Earnings per share reached $3.06, exceeding the anticipated $2.71, and reflecting a 60% increase compared to 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
In response to the positive earnings report, GM shares experienced a nearly 5% rise in pre-market trading on Tuesday, with the stock climbing over 37% so far this year. Following the close of trading on Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
CEO Mary Barra, in a letter to shareholders, highlighted the strong performance of GM’s gas-powered trucks and SUVs. She mentioned the launch of eight new or redesigned compact, mid-size, and full-size models in North America and affirmed that production of the electric Chevrolet Equinox is ramping up. Barra emphasized GM’s commitment to disciplined volume growth despite acknowledging that the company will not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market.
Furthermore, Barra announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle following a setback last October and instead focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to ceasing the production of the Origin in Detroit. Barra noted that opting for the Bolt should help alleviate regulatory concerns tied to the Origin’s unconventional design and reduce costs.
The automaker is also working to restructure its joint venture in China with SAIC Motor, which has been facing ongoing losses. GM reported a $104 million loss for the second quarter related to this venture. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is 50% lower than the previous year, as reported by Automotive News.