General Motors announced an increase in several financial projections for 2024 following a strong performance in the second quarter that surpassed Wall Street expectations. The Detroit automaker has raised its projected adjusted earnings for the year to between $13 billion and $15 billion, up from a previous range of $12.5 billion to $14.5 billion. Additionally, GM adjusted its targets for operating cash flow and earnings per share, while slightly lowering its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year and exceeding the anticipated $45 billion. Earnings per share also outperformed forecasts at $3.06, compared to the expected $2.71, representing a 60% increase from 2023. Net income increased by 14%, reaching $2.9 billion, up from $2.5 billion.
Following this positive news, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has seen an overall increase of over 37% this year. Additionally, the company declared a third-quarter cash dividend, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra praised the success of GM’s gas-powered trucks and SUVs, while announcing plans to launch eight new or redesigned vehicle models in North America. She indicated that GM is ramping up production of the electric Chevrolet Equinox and emphasized the company’s commitment to disciplined growth in the electric vehicle (EV) sector, despite having previously acknowledged that it would miss its goal of producing 1 million EVs in North America by the end of 2025 due to a slowdown in the market.
Furthermore, Barra shared an update on Cruise, GM’s self-driving division, which has decided to move away from its previously planned Origin vehicle model. Instead, it will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This pivot will not only address regulatory concerns regarding the Origin’s design but will also help reduce production costs.
On another note, GM is working to restructure its joint venture in China with SAIC Motor, where it reported a loss of $104 million in the last quarter. Production cuts of 70% at SAIC-GM have significantly impacted vehicle deliveries, which are down by 50% from the previous year.
Summary: General Motors has raised its financial guidance for 2024 after surpassing earnings expectations for the second quarter. The company reported over $47 billion in revenue and a significant increase in net income. Despite challenges in the electric vehicle sector and restructuring efforts in China, GM is committed to growth with new model launches and advancements in autonomous technology through its Cruise division.
Overall, GM’s upward revision of financial targets and strong quarterly performance signals resilience and adaptability in a changing automotive landscape, fostering optimism among investors and stakeholders alike.