General Motors has revised its financial projections for 2024, raising expectations after exceeding Wall Street predictions for its second quarter performance.
The automaker now anticipates adjusted earnings for the year to range between $13 billion and $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has adjusted its targets for operating cash flow and earnings per share, though it slightly reduced projections for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing over a 7% growth compared to the same period last year and surpassing Wall Street’s estimate of $45 billion, according to FactSet data. The company achieved earnings per share of $3.06, exceeding analysts’ expectations of $2.71 and marking a 60% increase from 2023. Net income rose by 14% to reach $2.9 billion, compared to $2.5 billion a year earlier.
Following the announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has seen an increase of over 37% this year. On Monday, the company also declared a cash dividend for the third quarter, further bolstering its stock performance.
In a letter to shareholders, CEO Mary Barra highlighted the company’s success with gas-powered trucks and SUVs. She also mentioned the launch of eight new or redesigned models across various sizes in North America. Barra noted the ramp-up in production of the electric Chevrolet Equinox, reiterating GM’s commitment to disciplined growth in electric vehicle (EV) production.
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing the setback to a slowdown in the market. Despite this, the company reported growth in EV sales during the last quarter.
In a significant operational shift, Barra announced that Cruise, GM’s autonomous vehicle division, would abandon its Origin model, which faced operational challenges following an incident last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the suspension of Origin production in Detroit.
During an analysts’ call, Barra mentioned that the use of the Bolt would mitigate regulatory concerns associated with the Origin’s distinctive design, such as its absence of a steering wheel. This change aims to reduce production costs and enhance resource optimization.
“Our vision to transform mobility using autonomous technology remains steadfast,” said Barra. “Every mile traveled and every simulation brings us closer because Cruise is an AI-first company.”
Additionally, GM is working to restructure its joint venture with SAIC Motor in China as it continues to face losses, having reported a $104 million loss for the second quarter. Production was significantly cut by 70% in June, with SAIC-GM delivering only 26,000 vehicles, which is half of what was delivered a year ago, as reported by Automotive News.