General Motors has revised its financial projections for 2024 after exceeding Wall Street’s expectations in the second quarter. The company now anticipates adjusted earnings between $13 billion and $15 billion for the year, up from a previous range of $12.5 billion to $14.5 billion. GM has also raised its targets for operating cash flow and earnings per share, although it slightly lowered its net income estimate for shareholders by less than 1%, now forecasting between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, which marks a more than 7% increase compared to the same period last year and surpasses Wall Street’s expectation of $45 billion, based on FactSet estimates. Earnings per share came in at $3.06, exceeding the analyst prediction of $2.71 and reflecting a 60% rise from 2023. Net income also rose 14% to $2.9 billion, compared to $2.5 billion a year ago.
The company’s stock surged nearly 5% in pre-market trading on Tuesday, and it has increased over 37% throughout the year. Additionally, GM announced a cash dividend for the third quarter that further boosted investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs and mentioned plans to launch eight new or redesigned vehicle models in North America. She also indicated that the production of the electric Chevrolet Equinox is ramping up, emphasizing that while the company is excited about their electric vehicles (EVs) and early successes, they remain focused on disciplined growth.
Earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by 2025 due to a market slowdown. Nonetheless, the company remains flexible and committed to producing based on demand, although EV sales did rise in the last quarter.
Furthermore, Barra announced that GM’s self-driving unit, Cruise, would abandon its plans for the Origin vehicle, which had faced operational challenges since an incident last October. Instead, Cruise will focus on testing the next-generation Chevrolet Bolt in Texas and Arizona. The decision to halt Origin production in Detroit resulted in a $600 million charge for GM.
During a recent call with analysts, Barra mentioned that utilizing the Bolt would address regulatory concerns related to the Origin’s unconventional design, such as its lack of a steering wheel. This shift will also help reduce costs per vehicle and allow GM to allocate resources more efficiently.
“Our vision to transform mobility using autonomous technology remains unchanged, and every mile traveled and every simulation brings us closer to that goal, as Cruise operates on an AI-first model,” Barra stated.
Additionally, GM is looking to restructure its joint venture in China with SAIC Motor, as it continues to incur losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM significantly cut production by 70%, delivering only 26,000 vehicles—50% less than the previous year, according to Automotive News.