General Motors is raising its financial projections for 2024 after significantly exceeding Wall Street’s expectations for the second quarter.
The Detroit-based automaker 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. Additionally, it raised targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders saw a slight reduction of less than 1%, now estimated between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase compared to the same period last year and surpassing the Wall Street expectation of $45 billion, according to FactSet data. Earnings per share reached $3.06, exceeding the anticipated $2.71 per share and reflecting a 60% increase from 2023. Net income rose by 14% to $2.9 billion, compared to $2.5 billion in the previous year.
Following this announcement, GM’s stock experienced a nearly 5% rise in pre-market trading, continuing a trend that has seen the stock increase by over 37% this year. After the market closed on Monday, GM also declared a third-quarter cash dividend, contributing to the stock’s upward momentum.
In a letter addressed to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She mentioned the launch of eight new or redesigned models across various sizes in North America. Additionally, GM is ramping up production of its electric Chevrolet Equinox, with Barra stating the company’s dedication to disciplined growth in electric vehicle production despite earlier remarks indicating GM would not meet its goal of producing 1 million electric vehicles in North America by 2025 due to a market slowdown.
Barra also announced that Cruise, GM’s autonomous vehicle division, would discontinue its Origin vehicle following operational setbacks last October. Instead, Cruise will focus on deploying its next-generation Chevrolet Bolt for testing in Texas and Arizona, marking a strategic decision to address regulatory concerns associated with the Origin’s unconventional design. GM incurred a $600 million charge linked to the halted production of the Origin in Detroit.
During a discussion with analysts, Barra emphasized that the company’s commitment to revolutionizing mobility through autonomous technologies remains steadfast, with progress being made with every mile traveled and simulation conducted.
Furthermore, GM is working to restructure its joint venture in China with SAIC Motor amidst ongoing financial losses, reporting a $104 million loss for the second quarter. In June, production cuts of 70% at SAIC-GM led to the delivery of only 26,000 vehicles, which is 50% less than the previous year, according to industry reports.