General Motors has raised its financial projections for 2024 following a strong performance that exceeded Wall Street expectations in the second quarter.
The Detroit-based automaker has revised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing over a 7% increase from the same period last year and surpassing Wall Street’s expectations of $45 billion, according to FactSet estimates. Earnings per share stood at $3.06, exceeding the analyst forecast of $2.71 per share and marking a 60% increase compared to the prior year. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
Following these positive results, GM’s stock surged nearly 5% in pre-market trading, contributing to an overall increase of more than 37% in stock value this year. After the market closed on Monday, GM also announced a third-quarter cash dividend that further boosted its stock price.
In a correspondence to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, noting that GM is preparing to launch eight new or redesigned models across various sizes in North America. She emphasized GM’s commitment to disciplined growth in production of the electric Chevrolet Equinox and stated, “As excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
However, earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company has indicated it would prioritize flexible production strategies based on demand, despite an increase in EV sales last quarter.
Furthermore, Barra announced that Cruise, GM’s autonomous driving unit, would abandon its Origin vehicle project after scaling back operations following an incident last October. Instead, Cruise will utilize the next-generation Chevrolet Bolt for vehicle testing in Texas and Arizona. GM incurred a $600 million charge tied to the suspension of Origin production in Detroit.
In a call with analysts, Barra explained that using the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This shift is also expected to reduce costs per unit and optimize resources.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra stated.
Additionally, GM is working on restructuring its joint venture with SAIC Motor in China, as it continues to incur losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM scaled back production by 70%, delivering 26,000 vehicles, which is a 50% decrease from the previous year, according to Automotive News.