General Motors has raised its financial outlook for 2024 after exceeding Wall Street expectations in its second quarter results. The automaker now anticipates adjusted earnings for the year between $13 billion and $15 billion, an increase from a previous estimate of $12.5 billion to $14.5 billion. GM has also revised its targets for operating cash flow and earnings per share, although it slightly decreased the projected net income for shareholders to between $10 billion and $11.4 billion, a reduction of less than 1%.
In its second quarter, GM reported a revenue of $47.9 billion, marking a rise of over 7% compared to the previous year, and surpassing Wall Street’s expectations of $45 billion. Earnings per share were recorded at $3.06, significantly higher than the anticipated $2.71 and up 60% from 2023. The company’s net income increased by 14% to $2.9 billion, compared to $2.5 billion the previous year.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading, contributing to a year-to-date increase of more than 37%. The company also declared a cash dividend for the third quarter after the market closed on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She mentioned the upcoming launch of eight new or redesigned vehicle models in North America, while also addressing the ramp-up in production of the electric Chevrolet Equinox. Barra emphasized the company’s commitment to balanced growth in electric vehicle production despite a recent acknowledgment that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market challenges.
Additionally, Barra announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle, shifting focus to the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a $600 million charge related to the halted production of the Origin.
During an analyst call, Barra reassured that the company’s vision for advancing mobility through autonomous technology remains unchanged. She remarked that further development and testing bring GM closer to its goals since Cruise operates primarily on artificial intelligence.
Finally, GM is working to restructure its joint venture with SAIC Motor in China, as the company continues to face losses. In the second quarter, GM reported a loss of $104 million linked to this venture. Recently, SAIC-GM reduced production by 70%, resulting in a delivery of 26,000 vehicles, which is 50% less than the previous year.