General Motors has adjusted its financial projections for 2024 upwards following a successful second quarter that exceeded Wall Street’s expectations. The company now anticipates adjusted earnings between $13 billion and $15 billion, an increase from previous estimates of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly revising expectations for net income attributable to shareholders down to a range of $10 billion to $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing a more than 7% increase year-over-year, and surpassing Wall Street’s anticipated $45 billion. Earnings per share reached $3.06, exceeding analysts’ expectations of $2.71 and marking a 60% increase compared to the previous year. Net income also rose by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock price surged nearly 5% in pre-market trading, contributing to a more than 37% increase in stock value this year. The company also declared a third-quarter cash dividend after Monday’s trading session, further supporting its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gasoline-powered trucks and SUVs and mentioned plans to launch eight new or redesigned models across various vehicle categories in North America. She indicated that the company is ramping up production of the electric Chevrolet Equinox, emphasizing a commitment to disciplined volume growth alongside excitement about electric vehicles (EVs).
However, Barra noted earlier this month that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company plans to adjust its production to meet demand, although EV sales saw growth in the last quarter.
Furthermore, Barra announced that GM’s autonomous driving division, Cruise, will abandon plans for its Origin vehicle following a previous operational rollback. Instead, Cruise will focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes with a $600 million charge linked to the discontinuation of the Origin production in Detroit.
During a recent call with analysts, Barra stated that utilizing the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This strategy is expected to reduce costs and optimize resources for GM.
Barra affirmed GM’s commitment to advancing mobility through autonomous technology, stating, “Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company.”
Additionally, GM is seeking to restructure its joint venture with SAIC Motor in China as it continues to face losses, reporting a $104 million loss for the second quarter. Production cuts by SAIC-GM earlier this year resulted in delivering only 26,000 vehicles, a 50% decline compared to the prior year.