General Motors has revised its financial projections for 2024, anticipating a stronger performance than previously expected following a successful second quarter that exceeded Wall Street forecasts.
The Detroit-based automaker has raised its adjusted earnings expectations for the year to a range of $13 billion to $15 billion, an increase from the prior estimate of $12.5 billion to $14.5 billion. It has also adjusted its targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders has been slightly revised downward by less than 1%, now expected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing more than a 7% increase from the previous year and surpassing the anticipated $45 billion, as per FactSet estimates. Earnings per share were reported at $3.06, significantly exceeding the expected $2.71 and marking a 60% rise compared to 2023. The company’s net income also rose by 14%, totaling $2.9 billion, up from $2.5 billion.
As a result of these positive results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, reflecting a more than 37% increase in value this year. Following the close of trading on Monday, the company announced a third-quarter cash dividend, further boosting stock performance.
In a communication to shareholders, CEO Mary Barra highlighted the success of GM’s traditional gasoline-powered trucks and SUVs. She shared that the company is currently working on the launch of eight new or redesigned vehicle models in North America. Additionally, Barra mentioned the ongoing scaling of production for the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in electric vehicle (EV) production while acknowledging earlier statements about a revised goal of producing 1 million EVs in North America by the end of 2025 due to a slowdown in the market.
Barra also announced a strategic shift for Cruise, GM’s autonomous vehicle division, which has chosen to abandon its Origin vehicle project after previously scaling back operations following an incident last year. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the stoppage of the Origin’s production in Detroit.
During an analyst call, Barra indicated that the use of the Chevrolet Bolt would address regulators’ concerns surrounding the unique design of the Origin, which lacks a traditional steering wheel. This change is expected to reduce costs per unit and help GM better allocate resources.
“Our vision to transform mobility using autonomous technology remains intact, and with every mile traveled, we move closer, as Cruise is fundamentally an AI-driven company,” Barra stated.
In addition, GM is working to restructure its joint venture with SAIC Motor in China due to ongoing financial losses, reporting a $104 million loss for the second quarter. SAIC-GM had to cut production by 70% in June, resulting in the delivery of only 26,000 vehicles, a 50% decline compared to the previous year.