General Motors has increased its financial outlook for 2024 after significantly exceeding Wall Street’s projections for its second quarter. The Detroit-based automaker now expects adjusted earnings to range between $13 billion and $15 billion, up from a prior estimate of $12.5 billion to $14.5 billion. Furthermore, it has raised its targets for operating cash flow and earnings per share, while slightly adjusting its expectations for net income attributable to shareholders down to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase from the previous year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding the anticipated $2.71 and representing a 60% rise compared to 2023. Net income grew 14%, amounting to $2.9 billion, up from $2.5 billion.
Following this news, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to an overall increase of more than 37% this year. After Monday’s trading, GM also announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gasoline-powered trucks and SUVs and mentioned the upcoming launch of eight new or redesigned vehicle models in North America. Barra emphasized GM’s commitment to disciplined growth in the electric vehicle (EV) market, particularly regarding the Chevrolet Equinox, despite acknowledging a slowdown in the electric vehicle segment that has led the company to reassess its goal of producing 1 million electric vehicles in North America by the end of 2025.
Additionally, Barra revealed that GM’s self-driving unit, Cruise, will no longer pursue its Origin vehicle and will instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a significant $600 million charge related to halting production of the Origin in Detroit. Barra noted that using the Bolt would help address regulatory concerns regarding the Origin’s unconventional design and reduce costs per unit.
“Our vision to transform mobility using autonomous technology remains unchanged, and every mile traveled, and every simulation, brings us closer to that goal,” Barra stated.
Furthermore, GM is working on restructuring its joint venture in China with SAIC Motor due to ongoing losses, reporting a $104 million loss in the second quarter. In June, the SAIC-GM partnership reduced production by 70%, delivering just 26,000 vehicles, which is a 50% decrease compared to the same period last year.