General Motors has updated its financial outlook for 2024, significantly exceeding Wall Street’s expectations for the second quarter. The automaker revised its anticipated adjusted earnings for the year, now expecting between $13 billion and $15 billion, an increase from the previous range of $12.5 billion to $14.5 billion. Additionally, GM raised its targets for operating cash flow and earnings per share, while slightly adjusting the forecast for net income attributable to shareholders down to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% from the same period last year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. The company’s earnings per share reached $3.06, exceeding analysts’ predictions of $2.71 and reflecting a 60% year-over-year increase. Net income rose by 14% to $2.9 billion from $2.5 billion a year earlier.
Following the earnings announcement, GM stock surged nearly 5% in pre-market trading, bringing its annual gain to more than 37%. The company also declared a cash dividend for the third quarter, contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, noting the company’s plans to launch eight new or redesigned vehicle models across various categories in North America. She also pointed out that production of the electric Chevrolet Equinox is ramping up, emphasizing GM’s commitment to disciplined growth in electric vehicle (EV) production. However, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market, stating the company would adapt by “building to demand,” although EV sales did grow in the last quarter.
Barra also revealed that Cruise, GM’s self-driving division, will abandon its Origin vehicle in favor of the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes in light of a previous incident that led to a rollback of Cruise’s operations last October. GM incurred a $600 million charge related to the suspension of Origin production in Detroit.
During a call with analysts, Barra explained that switching to the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This strategic move is expected to lower costs per unit and optimize resource allocation.
“Our vision to transform mobility using autonomous technology remains unchanged. Every mile and each simulation brings us closer to our goals, as Cruise is inherently an AI-first company,” Barra stated.
Furthermore, GM is working on restructuring its joint venture in China with SAIC Motor amid continuing financial losses, with the company reporting a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering just 26,000 vehicles, which is 50% less than the previous year, as reported by Automotive News.