General Motors has updated its financial projections for 2024, following strong performance that exceeded Wall Street’s expectations in the second quarter. The company has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. It has also revised its targets for operating cash flow and earnings per share, while slightly lowering 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 a more than 7% increase from the previous year and surpassing the Wall Street expectation of $45 billion. Earnings per share reached $3.06, exceeding analysts’ predictions of $2.71 and representing a 60% increase compared to 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion year-over-year.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, with its value increasing more than 37% so far this year. After the market closed on Monday, GM announced a cash dividend for the third quarter, contributing to the stock’s upward momentum.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, while announcing plans to launch eight new or redesigned models in North America. She also mentioned the ramp-up in production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in electric vehicles.
However, Barra previously indicated 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 has committed to adapting its production to meet demand, despite experiencing growth in EV sales during the last quarter.
Barra also revealed that Cruise, GM’s self-driving division, will abandon its Origin vehicle project after scaling back operations following an incident last October. Instead, Cruise will concentrate on employing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM faced a $600 million charge associated with ceasing production of the Origin in Detroit.
During a call with analysts, Barra stated that utilizing the Bolt would address regulatory concerns related to the Origin’s distinctive design, which lacked a steering wheel. This shift is expected to reduce costs per unit and streamline resource allocation for GM.
“Our vision to transform mobility using autonomous technology is unchanged,” Barra affirmed, adding that Cruise’s focus on artificial intelligence positions the company for future advancements.
Additionally, GM is restructuring its joint venture in China with SAIC Motor, which continues to experience financial losses. The company reported a $104 million loss in the second quarter. SAIC-GM significantly reduced production output by 70% in June, delivering 26,000 vehicles, representing a 50% decline compared to the previous year.