General Motors is enhancing its financial projections for 2024 after exceeding Wall Street’s predictions for the second quarter.
The Detroit-based automaker has increased its anticipated adjusted earnings for the year to between $13 billion and $15 billion, revising its previous range of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, although it slightly decreased its expectations for net income attributable to shareholders to a range of $10 billion to $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, a rise of over 7% from the previous year and surpassing the $45 billion that analysts had projected, as per FactSet estimates. The company’s earnings per share reached $3.06, exceeding the expected $2.71 and showing a significant increase of 60% compared to 2023. Net income for the quarter rose by 14%, from $2.5 billion to $2.9 billion.
As a result of this positive performance, GM stock saw a nearly 5% increase in pre-market trading on Tuesday, marking a gain of over 37% for the year. Following the market closure on Monday, GM announced a third-quarter cash dividend, which further contributed to the stock’s rise.
In her letter to shareholders, CEO Mary Barra highlighted the popularity of GM’s gas-powered trucks and SUVs, mentioning that the company is launching eight new or revamped models of varying sizes in North America. She also indicated that GM is increasing production of the electric Chevrolet Equinox and emphasized the company’s commitment to disciplined volume growth despite excitement around electric vehicles.
Earlier this month, Barra stated that GM is unlikely to meet its target of producing 1 million electric vehicles in North America by the end of 2025, due to a slowdown in the market. However, the automaker mentioned that it would remain flexible and build according to demand, with a noted growth in EV sales last quarter.
Barra also announced changes for Cruise, GM’s self-driving division, which previously scaled back its operations following an incident last October. The company has decided to abandon the Origin vehicle project, opting instead to utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM recorded a $600 million charge associated with the cessation of Origin production in Detroit.
During a call with analysts, Barra explained that using the Bolt would address regulatory concerns related to the Origin’s unconventional design, such as the absence of a steering wheel. She added that this shift would reduce per unit costs and help streamline GM’s resources.
“Our vision to transform mobility through autonomous technology remains intact, and every mile driven, and every simulation brings us closer as Cruise prioritizes AI innovation,” Barra stated.
In addition, GM is working to restructure its joint venture in China with SAIC Motor, which has been financially challenging; the company incurred a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, which is 50% fewer than the same period last year, according to Automotive News.