General Motors has revised its financial projections for 2024 following stronger-than-expected performance in the second quarter, surpassing Wall Street estimates. The automaker now forecasts adjusted earnings for the year to be between $13 billion and $15 billion, an increase from the prior estimate of $12.5 billion to $14.5 billion. GM has also raised its targets for operating cash flow and earnings per share, while slightly lowering the expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported a revenue of $47.9 billion, reflecting a more than 7% increase compared to the previous year and exceeding the anticipated $45 billion benchmark set by analysts, according to FactSet estimates. Earnings per share reached $3.06, surpassing analyst predictions of $2.71 per share and showing a 60% increase from 2023. The company’s net income surged 14% to $2.9 billion, up from $2.5 billion a year earlier.
Following this financial update, GM’s stock experienced a nearly 5% rise in pre-market trading, with a year-to-date increase of over 37%. On Monday, GM declared a cash dividend for the third quarter, further enhancing its stock appeal.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She mentioned the company’s plans to launch eight new or redesigned vehicle models across different sizes in North America. Barra also noted the scaling production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in electric vehicle production, despite acknowledging that GM might not reach its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowing market. However, GM’s EV sales did see growth in the last quarter.
Additionally, Barra informed shareholders that Cruise, GM’s autonomous driving division, will discontinue its Origin vehicle, which had previously faced operational setbacks. Instead, Cruise will use the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the suspension of Origin production.
During an analyst call, Barra expressed that the switch to the Bolt would mitigate regulatory concerns regarding the unique design of the Origin, including its absence of a steering wheel. This decision is expected to decrease unit costs and improve resource optimization.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, stating that every mile and simulation drives closer to this vision. Meanwhile, GM is also working on restructuring its joint venture in China with SAIC Motor, facing ongoing losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced its production by 70%, delivering 26,000 vehicles, which is 50% less compared to the previous year.