General Motors has increased its financial projections for 2024 after surpassing Wall Street forecasts for its second quarter performance. The Detroit-based automaker has revised its expected 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. Alongside this, GM has raised its targets for operating cash flow and earnings per share, although it slightly decreased its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a decline of less than 1%.
For the second quarter, GM reported revenues of $47.9 billion, showing an increase of more than 7% year-over-year and exceeding the anticipated $45 billion from analysts. Earnings per share stood at $3.06, significantly higher than the expected $2.71 and 60% above the earnings from last year. The net income rose by 14% to $2.9 billion, compared to $2.5 billion a year prior.
As a result of these strong results, GM’s stock saw an increase of nearly 5% in pre-market trading on Tuesday and has risen over 37% since the beginning of the year. Following the market close on Monday, GM also announced a cash dividend for the third quarter, providing an additional boost to its shares.
In her letter to shareholders, CEO Mary Barra highlighted the strong performance of the company’s gasoline-powered trucks and SUVs. She also mentioned that GM plans to roll out eight new or redesigned models across various sizes in North America, as well as scaling up production of the electric Chevrolet Equinox. Barra emphasized the company’s commitment to disciplined volume growth in electric vehicles (EVs), despite acknowledging that GM will not meet its goal of producing 1 million EVs in North America by the end of 2025 due to a market slowdown. However, EV sales did experience growth in the last quarter.
Furthermore, Barra announced that GM’s self-driving unit, Cruise, has decided to abandon its Origin vehicle following a previous incident that led to a reduction in operations. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to suspending production of the Origin in Detroit.
During a call with analysts, Barra indicated that using the Chevrolet Bolt alleviates concerns among regulators regarding the unconventional design of the Origin, which lacked a steering wheel. This shift will also reduce unit costs and help optimize GM’s resources.
Finally, GM is restructuring its joint venture in China with SAIC Motor, grappling with ongoing losses that included a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, which is a 50% decrease from the previous year, according to industry reports.