General Motors (GM) is adjusting its financial outlook for 2024 after exceeding Wall Street projections for its second quarter results. The automaker has revised its expected 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. GM has also raised its operating cash flow and earnings per share targets, while slightly lowering its net income forecast for shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting an over 7% increase compared to the same period last year, and surpassing Wall Street’s expectation of $45 billion, as per FactSet estimates. The company’s earnings per share reached $3.06, exceeding analysts’ predictions of $2.71 and representing a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion in the previous year.
Following the earnings report, GM’s stock experienced a nearly 5% increase in pre-market trading on Tuesday, marking a rise of more than 37% throughout the year. After the market close on Monday, GM announced a cash dividend for the third quarter, which further boosted the stock value.
In a message to shareholders, CEO Mary Barra highlighted the successful sales of GM’s gas-powered trucks and SUVs, and detailed plans to introduce eight new or redesigned models across various sizes in North America. She also emphasized the company’s commitment to orderly growth in production for the electric Chevrolet Equinox, stating that while there is enthusiasm for electric vehicles (EVs), GM will adopt a disciplined approach to volume expansion.
Earlier in the month, Barra indicated that GM is unlikely to meet its objective of developing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company plans to be adaptable and “build to demand,” although EV sales did experience an increase last quarter.
Additionally, Barra announced a strategic shift for Cruise, GM’s autonomous driving division, which will cease production of its Origin vehicle following a prior reduction in operations due to an incident last October. Cruise will now concentrate on utilizing the next-generation Chevrolet Bolt for vehicle testing in Texas and Arizona. GM recorded a $600 million charge due to the cessation of Origin production in Detroit.
In a call with analysts, Barra noted that leveraging the Bolt will resolve regulatory concerns related to Origin’s unconventional design, such as the absence of a steering wheel. This transition is expected to lower costs per unit and enhance resource allocation.
GM is also working on restructuring its joint venture with SAIC Motor in China, as it continues to face financial losses, including a reported $104 million loss for the second quarter. Production at SAIC-GM was cut by 70% in June, leading to the delivery of 26,000 vehicles, which is 50% lower than the previous year, according to Automotive News.