General Motors has significantly increased its financial projections for 2024 after exceeding Wall Street’s expectations in its second-quarter results.
The Detroit-based automaker has raised its anticipated adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has elevated its targets for operating cash flow and earnings per share. However, the outlook for net income attributable to shareholders was slightly reduced by less than 1%, now projected between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, representing a more than 7% increase from the prior year and surpassing Wall Street’s expectation of $45 billion, as per FactSet estimates. Earnings per share reached $3.06, exceeding the $2.71 per share expected by analysts and reflecting a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result, GM stock surged nearly 5% in pre-market trading on Tuesday, and the stock has increased over 37% this year. Following the close of trading on Monday, GM announced a third-quarter cash dividend, further boosting its stock.
In communication with shareholders, CEO Mary Barra highlighted the strong performance of GM’s gasoline-powered trucks and SUVs and stated that the company is launching eight new or redesigned vehicle models in North America. Barra also confirmed that GM is increasing production of the electric Chevrolet Equinox, emphasizing a commitment to disciplined growth in electric vehicle (EV) production despite early successes in the sector.
Earlier this month, Barra noted that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company intends to be adaptable and “build to demand,” although it reported a rise in EV sales last quarter.
Barra also revealed that Cruise, GM’s self-driving division which had to curtail operations following an incident last October, will discontinue its Origin vehicle. 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 cessation of Origin production in Detroit.
During a recent analyst call, Barra stated that using the Bolt would address regulatory concerns regarding the Origin’s unique features, such as its absence of a steering wheel. The change will also reduce costs per unit and allow GM to optimize its resources.
“Our vision to transform mobility using autonomous technology remains intact, and each mile traveled and simulation brings us closer to our goals, as Cruise is fundamentally an AI-first company,” Barra explained.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor, which has been operating at a loss; the company recorded a $104 million loss for the second quarter. Production at SAIC-GM was reduced by 70% in June, leading to deliveries of 26,000 vehicles—50% fewer than the same period last year, according to Automotive News.