General Motors has increased its financial projections for 2024 following a strong performance that exceeded analysts’ expectations in the second quarter. The automaker now anticipates adjusted earnings to range between $13 billion and $15 billion, up from a prior estimate of $12.5 billion to $14.5 billion. It has also raised its expectations for operating cash flow and earnings per share, while slightly lowering its forecast 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, reflecting a more than 7% increase from the previous year and surpassing the Wall Street forecast of $45 billion. Earnings per share stood at $3.06, exceeding the expected $2.71 and representing a 60% increase compared to 2023. The company’s net income rose 14% to $2.9 billion, an increase from $2.5 billion in the same period last year.
GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to a year-to-date gain of over 37%. Additionally, GM announced a third-quarter cash dividend after market close on Monday, bolstering investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs and mentioned the upcoming launch of eight new or redesigned models in North America. She also emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox, expressing excitement about early successes in electric vehicles (EVs) but stressing the importance of disciplined growth.
Despite acknowledging a slowdown in the market, Barra indicated that GM would remain flexible and adapt production to meet demand, noting that EV sales had grown in the last quarter. Earlier, she admitted that the company would not meet its target of producing 1 million electric vehicles in North America by the end of 2025.
In a strategic shift, Barra announced that Cruise, GM’s self-driving division, would abandon its unique Origin vehicle design in favor of using the next-generation Chevrolet Bolt for operations in Texas and Arizona. GM recognized a $600 million charge associated with the discontinuation of the Origin’s production in Detroit. During an analyst call, Barra indicated that utilizing the Bolt would mitigate regulatory concerns related to the Origin’s unconventional design, such as the absence of a steering wheel, while also reducing costs and optimizing resources.
Barra reaffirmed GM’s goal of transforming mobility through autonomous technology, stating that each mile traveled and simulation brings Cruise closer to its objectives. The company is also restructuring its joint venture with SAIC Motor in China, having incurred a $104 million loss in the second quarter alone. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is a 50% decline compared to the previous year.