General Motors has revised its financial projections for 2024 following a strong second quarter that exceeded Wall Street expectations.
The automaker has increased its forecast for adjusted earnings to between $13 billion and $15 billion, up from a previous range of $12.5 billion to $14.5 billion, and has also raised its targets for operating cash flow and earnings per share. However, the expectation for net income attributable to shareholders has been slightly revised down, now projected between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing a more than 7% increase compared to the same period last year, and surpassing the $45 billion anticipated by analysts, as per FactSet estimates. Earnings per share stood at $3.06, exceeding the expected $2.71 per share and showing a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result, GM shares surged nearly 5% in pre-market trading Tuesday. The stock price has increased over 37% this year, buoyed by the announcement of a third-quarter cash dividend after market close on Monday.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs and mentioned the launch of eight new or redesigned models across varying sizes in North America. She also emphasized the expansion in the production of the electric Chevrolet Equinox, stating the company remains dedicated to carefully managing its growth in electric vehicles, despite earlier comments indicating that GM would not reach its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market challenges, though EV sales did see a rise last quarter.
Additionally, Barra shared that GM’s self-driving division, Cruise, which had been scaling back operations following an incident last October, will discontinue its Origin vehicle. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for vehicle testing in Texas and Arizona. GM has incurred a $600 million charge linked to the halted production of the Origin in Detroit.
During an analyst call, Barra explained that the decision to use the Bolt will address regulatory concerns regarding the unique design of the Origin, such as its lack of a steering wheel, while also reducing production costs and optimizing resources.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, stating that each mile traveled and simulation contributes to this goal, as Cruise operates as an AI-centric company.
In other news, GM is also working on restructuring its joint venture in China with SAIC Motor, as the company faces losses, including a $104 million loss in the second quarter. Production was significantly cut by 70% in June, with SAIC-GM delivering 26,000 vehicles, marking a 50% decrease compared to the previous year.