General Motors has revised its financial projections for 2024 following a strong second-quarter performance that exceeded Wall Street expectations. The automaker has increased its expected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly reducing expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
During the second quarter, GM reported revenue of $47.9 billion, marking a year-over-year increase of more than 7% and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. The company’s earnings per share reached $3.06, exceeding the analysts’ forecast of $2.71 and reflecting a 60% growth compared to 2023. Net income also climbed 14% to $2.9 billion, up from $2.5 billion in the same period last year.
As a result of this strong performance, GM’s stock rose nearly 5% in pre-market trading, and the stock has seen a more than 37% increase this year. Following the close of trading on Monday, GM announced a cash dividend for the third quarter, further enhancing investor confidence.
In a letter to shareholders, CEO Mary Barra emphasized the success of their gas-powered trucks and SUVs, while announcing the launch of eight new or redesigned models in North America. She also mentioned that GM is ramping up production of the electric Chevrolet Equinox, reinforcing the company’s commitment to disciplined volume growth in the electric vehicle segment.
However, Barra acknowledged earlier this month 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 market slowdown. The company plans to remain flexible and produce vehicles based on demand, although EV sales did see growth in the last quarter.
Additionally, Barra announced a strategic shift for Cruise, GM’s self-driving unit, which has faced setbacks and will now discontinue its Origin vehicle. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM has taken a $600 million charge related to the suspension of Origin production.
During a conference call with analysts, Barra noted that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as the absence of a steering wheel. This change is expected to reduce per unit costs and help GM optimize its resources.
Barra reiterated the company’s vision to advance mobility through autonomous technology, stating that each simulation and mile traveled brings them closer to that goal. Meanwhile, GM continues to work on restructuring its joint venture with SAIC Motor in China, where it reported a loss of $104 million in the second quarter. In June, production cuts reduced output by 70%, with the company delivering 26,000 vehicles, which is half of what was achieved a year earlier, according to Automotive News.