General Motors is raising several financial projections for 2024 following strong performance in the second quarter, exceeding Wall Street expectations.
The automaker has increased its anticipated adjusted earnings for this year to a range of $13 billion to $15 billion, up from previous estimates of $12.5 billion to $14.5 billion. Additionally, it has raised expectations for operating cash flow and earnings per share. The forecast for net income attributable to shareholders has been slightly reduced to between $10 billion and $11.4 billion, a decrease of less than 1%.
For the second quarter, GM reported a revenue of $47.9 billion, representing a more than 7% increase from the previous year and surpassing the Wall Street expectation of $45 billion, according to FactSet. The earnings per share were reported at $3.06, exceeding the analysts’ forecast of $2.71 and marking a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following this report, GM’s stock surged nearly 5% in pre-market trading and has increased over 37% this year. Additionally, GM announced a cash dividend for the third quarter, further boosting the stock’s performance.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned the launch of eight new or redesigned vehicle models in North America. She indicated that the company is ramping up production of the electric Chevrolet Equinox, expressing commitment to controlled and disciplined growth for electric vehicles despite earlier stated goals of 1 million electric vehicles by the end of 2025 being unattainable due to market slowdowns.
Barra also announced that Cruise, GM’s autonomous driving unit, will cease production of its Origin vehicle and instead focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM recorded a $600 million charge associated with halting production of the Origin in Detroit.
In a call with analysts, Barra emphasized that this shift would address regulatory concerns regarding the unique design of the Origin, while also reducing costs and optimizing resources. She reaffirmed GM’s commitment to transforming mobility through autonomous technology, describing Cruise as an AI-first company.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor amid ongoing losses, recording a $104 million loss in the second quarter. Reports indicate that SAIC-GM significantly reduced production by 70% in June, delivering just 26,000 vehicles, which is 50% less than the previous year.