General Motors has elevated several financial projections for 2024 after exceeding Wall Street expectations during its second quarter.
The Detroit-based automaker has adjusted its anticipated adjusted earnings for the year, now forecasting between $13 billion and $15 billion, up from a previous range of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share, while slightly lowering its net income expectations for shareholders to a range of $10 billion to $11.4 billion.
In the second quarter, GM achieved revenue of $47.9 billion, reflecting a more than 7% increase year-over-year and surpassing Wall Street’s $45 billion estimate, according to FactSet. Earnings per share reached $3.06, exceeding analyst expectations of $2.71 and marking a 60% increase compared to 2023. Net income rose by 14%, totaling $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to a year-to-date increase of over 37%. The company also declared a third-quarter cash dividend after trading closed on Monday, which further enhanced the stock’s appeal.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gasoline-powered trucks and SUVs. She announced plans to launch eight new or redesigned models across compact, mid-size, and full-size categories in North America. Barra also mentioned that GM is ramping up production of the electric Chevrolet Equinox, emphasizing the company’s commitment to growth in the electric vehicle sector while maintaining disciplined volume targets.
Earlier in the month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this setback to a slowdown in the market. The company plans to adapt its production strategy to align with demand, while it did see a rise in electric vehicle sales last quarter.
Furthermore, Barra announced a strategic shift for Cruise, GM’s self-driving division, indicating that the unit will abandon its Origin vehicle following operational setbacks. Instead, Cruise will focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge linked to the cessation of Origin production in Detroit.
During a conversation with analysts, Barra explained that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, which lacked a steering wheel. She stated that this decision would also reduce costs per unit and facilitate better resource management.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra commented.
GM is also working to restructure its joint venture in China with SAIC Motor, as it continues to endure losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, which is 50% fewer than the year before, according to Automotive News.