General Motors has updated its financial projections for 2024 after exceeding Wall Street’s expectations for the second quarter of the year. The company now anticipates adjusted earnings between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. It has also raised its targets for operating cash flow and earnings per share, while slightly lowering its net income expectation for shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the same period last year and surpassing the anticipated $45 billion. Earnings per share were reported at $3.06, exceeding the $2.71 expected by analysts and representing a 60% increase over 2023. Net income grew by 14% to $2.9 billion, up from $2.5 billion.
The announcement led to a nearly 5% rise in GM’s stock in pre-market trading, with the stock having increased more than 37% throughout the year. Additionally, GM declared a cash dividend for the third quarter, providing an extra boost to its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of the company’s gas-powered trucks and SUVs. She shared that GM is on track to launch eight new or redesigned models across various sizes in North America. Barra emphasized the company’s commitment to disciplined production growth, particularly for the electric Chevrolet Equinox, despite a recent slowdown in 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 due to a market slowdown. However, she assured stakeholders that plans will remain flexible and will “build to demand,” with a notable growth in EV sales last quarter.
Barra also announced changes regarding Cruise, GM’s self-driving unit, which will discontinue the production of its Origin vehicle following previous operational setbacks. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. A $600 million charge was noted for stopping production of the Origin in Detroit.
During an analyst call, Barra mentioned that using the Bolt would address regulatory concerns regarding the Origin’s distinctive design, which lacked a steering wheel. This shift is expected to reduce costs per unit and streamline resource allocation.
Barra reaffirmed GM’s commitment to evolving mobility through autonomous technology, stating that “every mile traveled and every simulation brings us closer” to achieving their goals as Cruise positions itself as an AI-first company.
Furthermore, GM is looking to restructure its joint venture with SAIC Motor in China as it continues to face losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, a 50% decrease compared to the previous year.