General Motors has revised a number of financial projections for 2024 after surpassing analysts’ expectations for its second quarter.
The Detroit-based automaker has increased its forecast for adjusted earnings for the year, now expecting between $13 billion and $15 billion, up from the 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 lowered its expectations for net income attributable to shareholders by less than 1%, now predicting between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase from the previous year and exceeding the $45 billion anticipated by Wall Street according to FactSet estimates. The company also reported earnings per share of $3.06, surpassing the $2.71 projected by analysts and reflecting a 60% increase from 2023. Net income rose by 14% to $2.9 billion, compared to $2.5 billion in the same period last year.
Following this announcement, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to a more than 37% increase in stock value for the year. GM also declared a cash dividend for the third quarter after the market closed on Monday, further boosting investor confidence.
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 compact, mid-size, and full-size models in North America. Barra also emphasized the company’s focus on scaling production of the electric Chevrolet Equinox, expressing excitement about its electric vehicle (EV) initiatives while committing to responsible volume growth.
Earlier in the month, Barra indicated that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company plans to be adaptable and “build to demand,” although it did report an increase in EV sales over the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving vehicle unit that previously scaled back operations after an incident last October, will no longer produce its Origin vehicle. Instead, the focus will shift to the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge linked to the halt in production of the Origin in Detroit.
During an analyst call, Barra stated that using the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacks a steering wheel. This decision is expected to reduce costs per unit and optimize GM’s resources.
Barra affirmed GM’s commitment to transforming mobility through autonomous technology, stating that every mile traveled and simulation brings the company closer to achieving its goals.
Furthermore, GM is working to restructure its joint venture in China with SAIC Motor, as it continues to face losses, including a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is a 50% decrease compared to the same period last year.