General Motors has increased its financial projections for 2024 after exceeding Wall Street estimates for its second quarter results. The automaker has raised its adjusted earnings forecast for the year to between $13 billion and $15 billion, up from the previous range of $12.5 billion to $14.5 billion, while also adjusting its targets for operating cash flow and earnings per share. The company’s projections for net income attributable to shareholders was slightly reduced by less than 1%, now estimated at between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting an increase of over 7% from the prior year and surpassing Wall Street’s anticipated $45 billion. Earnings per share reached $3.06, exceeding the analysts’ forecast of $2.71 and representing a 60% rise compared to 2023. Net income rose by 14% to $2.9 billion, compared to $2.5 billion a year earlier.
In pre-market trading Tuesday, GM’s stock rose nearly 5%. The company’s stock has risen more than 37% this year, supported by a cash dividend announced after trading closed on Monday.
CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs in a letter to shareholders. She mentioned the company’s plans to launch eight new or redesigned models across various sizes in North America. Barra also stated that GM is ramping up production of the electric Chevrolet Equinox and committed to disciplined growth in electric vehicle production despite previously stating that the goal of producing 1 million electric vehicles in North America by 2025 will not be met due to a market slowdown. Nonetheless, GM’s EV sales increased in the last quarter.
Barra also revealed that Cruise, GM’s autonomous vehicle division, would cease development of its unique Origin vehicle following a regulatory incident last October. The division will pivot to using the next-generation Chevrolet Bolt for its testing in Texas and Arizona. GM incurred a $600 million charge related to the discontinuation of the Origin production in Detroit.
In discussions with analysts, Barra indicated that switching to the Bolt would address regulatory concerns regarding the Origin’s unconventional design, which did not include a steering wheel. This shift is expected to reduce costs per unit and optimize resource allocation.
Additionally, GM is working on restructuring its joint venture in China with SAIC Motor as it continues to face financial setbacks, reporting a $104 million loss in the second quarter. SAIC-GM significantly cut production by 70% in June, delivering 26,000 vehicles, which is a 50% decrease compared to the same time last year.