General Motors has updated its financial projections for 2024 following impressive results in the second quarter that exceeded Wall Street estimates.
The automaker now anticipates adjusted earnings for the year to be between $13 billion and $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM raised its targets for operating cash flow and earnings per share, while slightly reducing its net income expectations for shareholders to a range of $10 billion to $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, which is over a 7% increase from the prior year and surpasses the $45 billion anticipated by analysts, according to FactSet. The company’s earnings per share were $3.06, exceeding the expected $2.71 and representing a 60% rise compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following this announcement, GM’s stock rose nearly 5% in pre-market trading. The company’s stock has increased more than 37% this year. After trading ended on Monday, GM also declared a cash dividend for the third quarter, contributing to the stock’s positive performance.
In her letter to shareholders, CEO Mary Barra highlighted the popularity of GM’s gas-powered trucks and SUVs, mentioning that the company plans to introduce eight new or redesigned vehicle models in North America. She emphasized GM’s commitment to scaling up production of the electric Chevrolet Equinox, stating that while they are enthusiastic about electric vehicles (EVs), they will focus on steady growth.
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 slowdown in the market. Nevertheless, she noted that EV sales had increased in the previous quarter.
Additionally, Barra announced that Cruise, GM’s self-driving unit which faced operational setbacks after an incident last October, will discontinue its Origin vehicle. Instead, the company will use the next-generation Chevrolet Bolt for testing its autonomous vehicles in Texas and Arizona. GM incurred a $600 million charge linked to the halted production of the Origin.
During a call with analysts, Barra stated that utilizing the Bolt would address regulatory concerns regarding the Origin’s unconventional design, which notably lacks a steering wheel. This shift is expected to reduce costs and optimize resources.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, declaring that each simulation and mile driven brings the company closer to its goals, emphasizing that Cruise remains an AI-first company.
Moreover, GM is working on restructuring its joint venture in China with SAIC Motor, as it continues to face losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, significantly down from the previous year.