General Motors has revised its financial projections for 2024 upward after exceeding Wall Street’s expectations for its second quarter performance.
The Detroit-based automaker has raised 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 adjusted its targets for operating cash flow and earnings per share, while slightly lowering its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, representing an over 7% rise from the same period last year and surpassing Wall Street’s forecast of $45 billion, according to FactSet estimates. The company achieved earnings per share of $3.06, exceeding analysts’ expectations of $2.71 and marking a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to a 37% increase in stock value since the start of the year. After market close on Monday, GM also declared a cash dividend for the third quarter, which further bolstered investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the strong performance of the company’s gas-powered trucks and SUVs, and announced plans to launch eight new or redesigned vehicle models across various segments in North America. Barra emphasized GM’s commitment to disciplined volume growth for the electric Chevrolet Equinox, stating that while the company is excited about its electric vehicles (EVs) and early successes, it is focused on sustainable growth.
Earlier this month, however, Barra acknowledged that GM would not reach its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this setback to a slowdown in the market. The company plans to adapt to demand, even as its electric vehicle sales saw an increase last quarter.
Additionally, Barra announced a strategic shift for Cruise, GM’s autonomous driving unit, which will discontinue the Origin vehicle after halting operations following 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 charge related to the stoppage of Origin production in Detroit.
During a call with analysts, Barra expressed that utilizing the Bolt would mitigate regulatory concerns regarding the unique design of the Origin, including its absence of a steering wheel. This transition is expected to reduce costs per unit and enhance resource optimization for the company.
“Our vision to transform mobility with autonomous technology remains steadfast, and every mile traveled and simulation brings us closer, as Cruise operates as an AI-first company,” Barra stated.
Moreover, GM is looking to restructure its joint venture with SAIC Motor in China, amid ongoing financial losses; the company reported a loss of $104 million for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, half of what was delivered during the same period last year.