General Motors is increasing its financial projections for 2024 after exceeding Wall Street expectations for its second-quarter performance. The Detroit-based automaker has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has adjusted its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
The company reported second-quarter revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year and surpassing the $45 billion forecasted by analysts, according to FactSet. Earnings per share were reported at $3.06, well above the expected $2.71 and 60% higher than in 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has seen an increase of over 37% this year. GM also declared a cash dividend for the third quarter after market close on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, and mentioned ongoing efforts to launch eight new or redesigned vehicle models in North America. She also discussed the scaling up of production for the electric Chevrolet Equinox and emphasized GM’s commitment to “disciplined volume growth” in electric vehicles.
Earlier this month, Barra indicated that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market fluctuations. However, she pointed out that the company’s electric vehicle sales did see growth last quarter.
Furthermore, Barra announced a strategic shift for Cruise, GM’s self-driving division that had to scale back operations after a prior incident. The company will discontinue the Origin vehicle and focus on the next-generation Chevrolet Bolt for testing its autonomous technology in Texas and Arizona. This decision also led GM to incur a $600 million charge related to ceasing the production of the Origin in Detroit.
During a call with analysts, Barra asserted that using the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel, and would also help optimize costs and resources for GM.
In addition to its domestic strategies, GM is working on restructuring its joint venture in China with SAIC Motor, as it faces ongoing losses, including a reported $104 million loss for the second quarter. Recent reports indicated that SAIC-GM reduced production by 70%, resulting in 26,000 vehicle deliveries, which is 50% lower than a year ago, according to Automotive News.