General Motors is raising several of its financial projections for 2024 following impressive results that exceeded Wall Street’s forecasts for the second quarter.
The company has updated its expected adjusted earnings for the year to range between $13 billion and $15 billion, an increase from the previous projection of $12.5 billion to $14.5 billion. Additionally, GM has raised its forecasts for operating cash flow and earnings per share, while slightly reducing its expectations for net income attributable to shareholders by less than 1%, now estimated at between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% year-over-year increase and surpassing Wall Street’s expectation of $45 billion, according to FactSet. The company’s earnings per share were $3.06, exceeding analysts’ predictions of $2.71 and representing a 60% increase over the previous year. Net income rose 14% to $2.9 billion, up from $2.5 billion.
As a result of these positive results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, bringing its gains for the year to over 37%. On Monday, the company also announced a third-quarter cash dividend, which contributed to the stock’s increase.
In a message to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and elaborated on plans to launch eight new or redesigned models in North America across various sizes. Barra emphasized that GM is ramping up production of the electric Chevrolet Equinox and reiterated the company’s commitment to measured growth in electric vehicle (EV) output, despite earlier comments that GM will not meet its goal of producing 1 million EVs in North America by late 2025 due to a market downturn.
Barra informed that GM’s self-driving unit, Cruise, would discontinue the Origin vehicle, which faced operational setbacks after an incident last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million expense related to pausing Origin production in Detroit.
During a call with analysts, Barra noted that employing the Bolt addresses regulatory concerns about the unique design of the Origin, which lacks a steering wheel. This decision will also reduce costs per unit and allow GM to better allocate resources.
“Our vision to transform mobility using autonomous technology remains steadfast,” Barra stated, emphasizing that each simulation and every mile driven brings Cruise closer to its goals as an AI-driven company.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China due to ongoing losses, which amounted to $104 million in the second quarter. In June, production at SAIC-GM was reduced by 70%, resulting in the delivery of 26,000 vehicles, a 50% decrease from the previous year, according to Automotive News.