General Motors has announced an increase in several financial projections for 2024 following a strong second-quarter performance that exceeded Wall Street expectations.
The company has raised 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. Additionally, GM has increased its targets for operating cash flow and earnings per share, while slightly lowering net income expectations for shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, which represents more than a 7% increase compared to the same period last year and surpasses the $45 billion forecast from Wall Street analysts, according to FactSet estimates. The company’s earnings per share reached $3.06, exceeding the expected $2.71 and marking a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following the news, GM’s stock experienced a nearly 5% rise in pre-market trading on Tuesday, contributing to a 37% overall increase in the stock price this year. In addition, GM declared a third-quarter cash dividend after trading closed on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of their gas-powered trucks and SUVs and noted the launch of eight new or redesigned models set for North America. She emphasized the commitment to scaling production of the electric Chevrolet Equinox, while expressing excitement over the company’s early successes in the electric vehicle sector, reiterating a focus on disciplined growth.
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company plans to adapt to demand fluctuations, though EV sales saw growth in the last quarter.
In another development, Barra revealed that Cruise, GM’s self-driving unit, will discontinue its Origin vehicle model following a reduction in operations after an incident last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes with a $600 million charge related to the halt in Origin production in Detroit.
During an analyst call, Barra stated that using the Bolt addresses regulatory concerns about the Origin’s unconventional design, such as its lack of a steering wheel. This shift is expected to reduce costs per unit and optimize resources.
Barra reaffirmed GM’s vision to reshape mobility through autonomous technology, highlighting that every mile traveled and simulation executed brings Cruise closer to its objectives as an AI-focused company.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, which has been facing financial challenges, resulting in a $104 million loss in the second quarter. Earlier in June, production cuts at the SAIC-GM joint venture resulted in a 70% reduction, with only 26,000 vehicles delivered, a 50% decrease compared to the previous year, according to Automotive News.