General Motors is adjusting several of its financial projections for 2024 after exceeding Wall Street’s expectations in the second quarter.
The Detroit-based manufacturer has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, it has revised its targets for operating cash flow and earnings per share. The forecast for net income attributable to shareholders was subtly decreased by less than 1%, now estimated between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year and surpassing the Wall Street estimate of $45 billion, according to FactSet data. The earnings per share stood at $3.06, exceeding the $2.71 anticipated by analysts and representing a 60% increase from 2023. Net income also rose by 14%, reaching $2.9 billion compared to $2.5 billion the previous year.
Following this announcement, GM’s stock surged nearly 5% in pre-market trading on Tuesday, reflecting a year-to-date increase of over 37%. After the market closed on Monday, GM also declared a cash dividend for the third quarter, contributing to the stock’s positive performance.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of the company’s gas-powered trucks and SUVs. She noted that GM is in the process of launching eight new or redesigned models across compact, mid-size, and full-size categories in North America. Barra stressed that while GM is enthusiastic about its electric vehicles (EVs) and has achieved initial success, the company is dedicated to careful volume growth, particularly with its electric Chevrolet Equinox.
Earlier in the month, Barra acknowledged that GM would not meet its objective of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company plans to maintain flexibility by building according to demand, although EV sales did see growth in the last quarter.
Additionally, Barra confirmed that Cruise, GM’s autonomous driving division, would abandon its Origin vehicle following an operational pullback after an incident in October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for vehicle testing in Texas and Arizona. This decision resulted in a $600 million charge linked to the cessation of Origin production in Detroit.
During a call with analysts, Barra expressed that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. She also mentioned that this change would reduce costs per unit and enhance resource optimization.
“Our vision for transforming mobility through autonomous technology remains intact,” Barra said. “Every mile traveled and every simulation brings us closer to that goal, as Cruise operates as an AI-first company.”
Moreover, GM is restructuring its joint venture in China with SAIC Motor amid ongoing losses, reporting a $104 million loss in the second quarter alone. In June, SAIC-GM significantly reduced production by 70%, with vehicle deliveries falling to 26,000, which is 50% less than the previous year.