General Motors has updated its financial projections for 2024 following a strong performance that exceeded Wall Street’s expectations for the second quarter.
The Detroit-based automaker has revised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share but slightly lowered 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, representing a more than 7% increase year-over-year and surpassing Wall Street’s estimates of $45 billion, as per FactSet. Earnings per share reached $3.06, which is higher than the forecasted $2.71 and reflects a 60% increase compared to 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion in the same quarter last year.
Following the earnings report, GM’s stock saw a nearly 5% rise in pre-market trading on Tuesday and has gained over 37% this year. The company also announced a cash dividend for the third quarter, contributing to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs, stating that the company is set to launch eight new or redesigned models in North America across various sizes. Barra emphasized the scaling production of the electric Chevrolet Equinox and affirmed the company’s commitment to disciplined volume growth despite the early success of its electric vehicles (EVs).
Earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million EVs in North America by the end of 2025, attributing this setback to a slowdown in the market. However, she mentioned that the company would remain flexible and adapt production to meet demand, noting a growth in EV sales during the last quarter.
The CEO also revealed a shift in strategy for Cruise, GM’s self-driving division, which had to scale back its operations following an incident last October. Cruise will cease development of its Origin vehicle and instead focus on utilizing the next-generation Chevrolet Bolt for tests in Texas and Arizona. GM incurred a $600 million charge related to the discontinuation of the Origin’s production in Detroit.
During a recent analyst call, Barra stated that using the Bolt would address regulatory concerns regarding the Origin’s unique design, which included the absence of a steering wheel. The change is expected to reduce costs per unit and enhance resource optimization.
Barra reiterated GM’s commitment to transform mobility through autonomous technology, stating that each mile traveled and every simulation brings the company closer to its vision, as Cruise operates as an AI-first enterprise.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China as it continues to face losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is 50% less than the previous year, according to Automotive News.