General Motors is increasing its financial projections for 2024 after exceeding Wall Street’s expectations for its second-quarter performance.
The automaker has revised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, a rise from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has elevated its targets for operating cash flow and earnings per share. However, the expectation for net income attributable to shareholders has been slightly decreased by less than 1%, now projected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase compared to the previous year, surpassing the $45 billion forecasted by analysts, according to FactSet. The earnings per share reached $3.06, exceeding the analyst expectation of $2.71 and representing a 60% growth from 2023. Net income increased by 14%, rising to $2.9 billion from $2.5 billion.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday, and it has seen an increase of more than 37% this year. After the closing of the trading session on Monday, GM also declared a cash dividend for the third quarter, contributing to the stock’s rise.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, while mentioning the launch of eight new or redesigned models in North America, covering compact, mid-size, and full-size segments. Barra emphasized the company’s commitment to increasing production of the electric Chevrolet Equinox, addressing the significance of disciplined volume growth alongside early success in the electric vehicle market.
Earlier this month, Barra acknowledged that GM is unlikely to meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company has indicated a flexible approach, stating that it will adjust production based on demand, although last quarter showed a rise in EV sales.
Barra also announced a strategic shift for Cruise, GM’s self-driving division. The company will discontinue its Origin vehicle and instead focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a $600 million charge related to halting production of the Origin in Detroit.
During a call with analysts, Barra mentioned that using the Bolt would mitigate regulatory concerns associated with the Origin’s distinctive design, such as its absence of a steering wheel. She added that this strategy would reduce costs per unit and allow GM to better allocate its resources.
“Our vision to transform mobility using autonomous technology remains intact; every mile traveled and every simulation brings us closer, as Cruise operates with an AI-first approach,” Barra stated.
In addition, GM is working to restructure its joint venture with SAIC Motor in China, as the company continues to incur losses, posting a $104 million loss for the second quarter. In June, SAIC-GM significantly decreased production by 70%, delivering 26,000 vehicles, which is 50% fewer than the same period last year, according to Automotive News.