General Motors has raised several financial projections for 2024 after exceeding Wall Street’s expectations for the second quarter.
The automaker has revised its forecast for adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM raised 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, a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% rise year-over-year and surpassing the anticipated $45 billion according to FactSet estimates. Earnings per share were $3.06, exceeding analysts’ expectations of $2.71 and representing a 60% increase compared to 2023. Net income also increased by 14%, reaching $2.9 billion up from $2.5 billion.
As a result of this strong performance, GM’s stock saw an almost 5% increase in pre-market trading on Tuesday and has risen over 37% this year. Following the close of trading on Monday, GM announced a third-quarter cash dividend, contributing to the overall stock boost.
In a letter to shareholders, CEO Mary Barra highlighted the company’s success with its gas-powered trucks and SUVs and mentioned plans to launch eight new or redesigned models in North America. She emphasized GM’s commitment to disciplined growth while scaling production of the electric Chevrolet Equinox. Although Barra 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 market slowdown, she noted that EV sales did increase in the last quarter.
In another development, Barra revealed that Cruise, GM’s self-driving division, will discontinue the Origin vehicle concept and instead focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a prior setback for Cruise, which required a rollback of operations after an incident last October. GM incurred a $600 million charge linked to the suspension of Origin production in Detroit.
During an analyst call, Barra explained that using the Bolt would help address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. The transition is also expected to reduce costs per unit and optimize GM’s resources.
Barra reiterated the company’s commitment to transforming mobility with autonomous technology, stating that every mile traveled and every simulation brings Cruise closer to that vision.
Moreover, GM is working to restructure its joint venture with SAIC Motor in China amid ongoing losses, suffering a $104 million loss in the second quarter. Recently, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% less than the previous year.