General Motors has increased its financial outlook for 2024 following a strong performance in the second quarter that exceeded Wall Street’s projections.
The Detroit-based automaker has revised its expected adjusted earnings for the year to range between $13 billion and $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. It has also elevated its targets for operating cash flow and earnings per share. However, the company slightly reduced its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
For the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% from the same period last year and surpassing the Wall Street expectation of $45 billion, as per FactSet estimates. The earnings per share reached $3.06, exceeding the anticipated $2.71, and reflected a 60% rise compared to 2023. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to an overall increase of more than 37% in its stock price this year. GM also announced a cash dividend for the third quarter after the regular trading session closed on Monday, which further supported the stock.
In a communication to shareholders, CEO Mary Barra highlighted the company’s successful gas-powered trucks and SUVs while announcing plans to introduce eight new or redesigned models in North America across various size categories. Barra emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox and expressed enthusiasm for the progress in the electric vehicle (EV) segment, stating that the company aims for disciplined growth in volume.
Earlier this month, Barra acknowledged that GM would not achieve its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. Despite this, the company reported growth in EV sales last quarter, emphasizing flexibility to meet demand.
Additionally, CEO Barra shared that Cruise, GM’s self-driving unit, would abandon the production of its Origin vehicle, focusing instead on the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge relating to the cessation of Origin production in Detroit. Barra noted that the switch to the Bolt would address regulators’ concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This change is expected to reduce unit costs and help optimize resources.
Barra reiterated GM’s vision of transforming mobility through autonomous technology, highlighting that each mile traveled and simulation furthers their objectives as Cruise is rooted in AI-driven strategies.
Finally, GM is working to restructure its joint venture in China with SAIC Motor due to ongoing losses, having reported a $104 million loss for the second quarter alone. In June, the joint venture, SAIC-GM, reduced its production by 70%, delivering 26,000 vehicles, which is 50% lower than the previous year, according to Automotive News.