General Motors has adjusted its financial outlook for 2024 following a strong performance that exceeded Wall Street projections for its second quarter.
The company has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate 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 projections for net income attributable to shareholders, now expected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, which is over 7% higher than the same period last year and surpassed the $45 billion estimate from Wall Street analysts, according to FactSet. The company posted earnings per share of $3.06, exceeding the expected $2.71 and marking a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result of the positive financial news, GM’s stock experienced a nearly 5% increase in pre-market trading on Tuesday, with the stock price rising over 37% since the start of the year. GM also announced a cash dividend for the third quarter, contributing further to its stock’s boost.
In a shareholder letter, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned the launch of eight new or redesigned models in North America. Barra also discussed the ramp-up of production for the electric Chevrolet Equinox, emphasizing the company’s commitment to careful and disciplined growth in the electric vehicle (EV) market.
Earlier in the month, Barra acknowledged that GM would not meet its target of producing one million electric vehicles in North America by the end of 2025 due to a market slowdown. The company intends to adapt to demand, despite experiencing growth in EV sales last quarter.
Additionally, Barra revealed that Cruise, GM’s self-driving division, would be discontinuing its Origin vehicle, which faced operational setbacks last October. Instead, Cruise will focus on testing the next-generation Chevrolet Bolt in Texas and Arizona. GM incurred a $600 million charge related to halting production of the Origin.
During a call with analysts, Barra stated that using the Bolt would resolve regulatory concerns regarding the Origin’s unconventional design. This pivot is expected to reduce costs per vehicle and optimize GM’s resources.
“Our vision to transform mobility using autonomous technology is unchanged,” Barra remarked. “Every mile traveled and every simulation brings us closer, as Cruise is an AI-first company.”
Furthermore, GM is seeking to reorganize its joint venture in China with SAIC Motor, as it continues to face losses, reporting a $104 million loss for the second quarter. In June, the SAIC-GM joint venture reduced production by 70% and sold 26,000 vehicles, which is a 50% decrease compared to the prior year.