General Motors has upgraded its financial projections for 2024 following a strong performance that exceeded Wall Street’s expectations in the second quarter.
The automaker raised its anticipated adjusted earnings for the year, now estimating between $13 billion and $15 billion, up from the previous range of $12.5 billion to $14.5 billion. Goals for operating cash flow and earnings per share were also increased. However, the forecast for net income attributable to shareholders was slightly reduced, now estimated to be between $10 billion and $11.4 billion, a decrease of less than 1%.
In terms of revenue, GM reported $47.9 billion for the second quarter, marking an increase of over 7% compared to the previous year, surpassing the anticipated $45 billion as per FactSet estimates. Earnings per share reached $3.06, exceeding the analysts’ expectation of $2.71, and representing a 60% rise from 2023. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, and it has increased over 37% this year. After the trading day closed on Monday, the company announced a cash dividend for the third quarter, further buoying its stock.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of their gas-powered trucks and SUVs, mentioning the introduction of eight new or redesigned compact, mid-size, and full-size models in North America. She also discussed the scaling production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined volume growth.
Despite the positive outlook, Barra acknowledged 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 plans to be flexible and “build to demand,” although electric vehicle sales have seen growth over the last quarter.
Barra also announced that Cruise, GM’s self-driving unit, will abandon its Origin vehicle after previously scaling back operations following an incident last October. Instead, the company will focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona, taking a $600 million charge due to the halted production of the Origin.
During a discussion with analysts, Barra stated that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, which lacked a steering wheel. This shift is expected to reduce costs per unit and help GM optimize its resources.
GM is also working on restructuring its joint venture with SAIC Motor in China, where it continues to incur losses. The company reported a $104 million loss for the second quarter, while production cuts by SAIC-GM reduced output by 70%, resulting in the delivery of 26,000 vehicles, a 50% decrease from the same period last year.