General Motors has revised its financial outlook for 2024, following strong results that exceeded Wall Street’s predictions for the second quarter. The Detroit-based automotive giant has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous forecast of $12.5 billion to $14.5 billion. In addition, GM has raised its targets for operating cash flow and earnings per share. However, expectations for net income attributable to shareholders have been slightly adjusted downward, now estimated to fall between $10 billion and $11.4 billion, a decrease of less than 1%.
The company reported second-quarter revenue of $47.9 billion, representing a 7% year-over-year increase and surpassing the anticipated $45 billion. Earnings per share reached $3.06, beating analyst expectations of $2.71 and marking a 60% increase compared to 2023. Net income for the quarter increased by 14%, rising to $2.9 billion from $2.5 billion.
In response to these results, GM’s stock rose nearly 5% during pre-market trading on Tuesday. The stock has seen over a 37% increase this year. After Monday’s market close, GM also declared a cash dividend for the third quarter, further boosting investor confidence.
CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs in a letter to shareholders, while also announcing plans to launch eight new or redesigned compact, mid-size, and full-size models in North America. Additionally, Barra noted that GM is increasing production of the electric Chevrolet Equinox, stating the company is committed to disciplined volume growth even as EV sales increased last quarter.
Earlier this month, Barra acknowledged that GM would not achieve its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing the delay to a slowdown in the market. Despite this, the company intends to “build to demand.”
In another development, the CEO mentioned that Cruise, GM’s self-driving division which had scaled back operations after an incident last October, will be discontinuing its Origin vehicle model. Instead, Cruise plans to utilize the next-generation Chevrolet Bolt for tests in Texas and Arizona. GM incurred a $600 million charge due to the suspension of Origin production in Detroit.
During an analysts’ call, Barra expressed that employing the Bolt would address regulatory concerns about the Origin’s unconventional design, such as its lack of a steering wheel. This strategic shift is expected to reduce unit costs and enhance resource optimization.
GM is also working on restructuring its joint venture in China with SAIC Motor amid ongoing losses, which amounted to $104 million in the second quarter. In June, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, marking a 50% decrease from the previous year.