General Motors has increased its financial projections for 2024 after exceeding Wall Street’s expectations for the second quarter. The automaker now anticipates adjusted earnings for the year to range between $13 billion and $15 billion, a rise 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, while slightly lowering its 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, marking an increase of over 7% from the previous year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. The company achieved earnings per share of $3.06, exceeding analysts’ predictions of $2.71 and up 60% compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following the positive financial results, GM’s stock experienced nearly a 5% increase in pre-market trading on Tuesday and has risen more than 37% since the beginning of the year. The company also announced a third-quarter cash dividend after the market closed on Monday, contributing to the stock’s boost.
In a letter to shareholders, CEO Mary Barra highlighted the successful performance of GM’s gas-powered trucks and SUVs and mentioned the launch of eight new or redesigned compact, mid-size, and full-size models in North America. She stated that GM is expanding production of the electric Chevrolet Equinox, expressing excitement about the company’s early success in electric vehicles while emphasizing a commitment to disciplined growth in production volumes.
Earlier in the month, 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 market slowdown. The company plans to remain adaptable and “build to demand,” though EV sales did experience growth last quarter.
Barra also shared that Cruise, GM’s self-driving division, would discontinue its Origin vehicle, which faced operational challenges after an incident last October. Instead, Cruise plans to utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge associated with ceasing production of the Origin in Detroit.
During a call with analysts, Barra noted that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as the absence of a steering wheel. She added that this adjustment would reduce costs per unit and help optimize resources.
“Our vision to transform mobility using autonomous technology remains unchanged, and each mile traveled and simulation brings us closer to achieving that,” Barra stated in her remarks.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, where it has continued to experience losses, reporting a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, resulting in the delivery of 26,000 vehicles, which is 50% fewer than the previous year, as per Automotive News.