General Motors has increased its financial projections for 2024 after surpassing Wall Street expectations in its second quarter results.
The automaker has adjusted its expected adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the prior forecast of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share. However, expectations for net income attributable to shareholders have been slightly reduced, now anticipated to fall between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, reflecting a more than 7% increase from the previous year, and surpassing the $45 billion anticipated by analysts, according to FactSet. The company’s earnings per share reached $3.06, exceeding the expected $2.71 per share and marking a 60% rise compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has gained over 37% this year. After market close on Monday, GM also declared a third-quarter cash dividend, further boosting its stock value.
In her letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, noting that the company is planning the launch of eight new or redesigned vehicle models across compact, mid-size, and full-size categories in North America. She discussed the scaling up of production for the electric Chevrolet Equinox, expressing enthusiasm for GM’s electric vehicle initiatives while emphasizing a commitment to disciplined volume growth.
Earlier this month, Barra indicated that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company plans to remain flexible, stating it would “build to demand,” although EV sales did see an increase in the last quarter.
Barra also announced changes for Cruise, GM’s autonomous driving division, which will shift focus from the Origin vehicle to the next-generation Chevrolet Bolt for testing in Texas and Arizona. The decision follows a halt in production of the Origin after a serious incident last October. GM has recorded a $600 million charge linked to ceasing Origin production.
In discussions with analysts, Barra reassured that utilizing the Bolt would address regulatory concerns associated with the Origin’s unconventional design, which lacks a steering wheel. This change is also expected to reduce costs and improve resource allocation.
GM is also working on restructuring its joint venture in China with SAIC Motor, facing significant losses, including a $104 million loss for the second quarter. In June, SAIC-GM cut its production by 70%, reporting the delivery of 26,000 vehicles, a 50% decline compared to the previous year, according to Automotive News.