General Motors has updated its financial projections for 2024, significantly exceeding Wall Street expectations for its second quarter performance. The Detroit-based automaker has revised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has increased 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, reflecting more than a 7% increase year-over-year and surpassing the $45 billion Wall Street predicted, according to FactSet estimates. Earnings per share reached $3.06, exceeding analysts’ expectations of $2.71 per share and showing a 60% increase compared to the previous year. Net income rose 14%, climbing from $2.5 billion to $2.9 billion.
Following this news, GM’s stock rose almost 5% in pre-market trading on Tuesday, marking a more than 37% increase for the year. The company also declared a third-quarter cash dividend after trading closed on Monday, further boosting investor confidence.
In a message to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She mentioned that the company is launching eight new or redesigned vehicle models in North America, including compact, mid-size, and full-size options. Additionally, Barra indicated that GM is expanding production of the electric Chevrolet Equinox, emphasizing a commitment to disciplined volume growth alongside excitement about its electric vehicle (EV) lineup.
Barra previously acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company plans to adapt its production to meet demand, despite experiencing growth in EV sales last quarter.
Furthermore, Barra announced that Cruise, GM’s self-driving division, will discontinue its Origin vehicle, which faced operational challenges after a previous incident. Instead, Cruise will focus on testing the next-generation Chevrolet Bolt in Texas and Arizona. GM recorded a $600 million charge related to the suspension of Origin production in Detroit.
In addressing regulatory concerns about the unique design of the Origin, particularly its lack of a steering wheel, Barra stated that utilizing the Bolt would mitigate these issues. This shift is expected to reduce costs per unit and optimize resources for GM.
Lastly, GM is working on restructuring its joint venture with SAIC Motor in China due to ongoing losses; the company reported a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, which is a 50% decrease compared to the previous year.