General Motors is adjusting its financial outlook for 2024 after significantly exceeding Wall Street’s expectations in the second quarter. The company has revised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. It also raised its targets for operating cash flow and earnings per share, although expectations for net income attributable to shareholders were slightly reduced, now projected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase from the same period last year and surpassing analysts’ expectations of $45 billion. Earnings per share came in at $3.06, exceeding the $2.71 forecasted by analysts and reflecting a 60% increase compared to 2023. The company’s net income rose 14%, totaling $2.9 billion, up from $2.5 billion.
Following these positive results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, showing an overall increase of more than 37% for the year. On Monday, GM announced a third-quarter cash dividend, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs. She mentioned that the company is rolling out eight new or redesigned models in North America. Barra also discussed the scaling up of production for the electric Chevrolet Equinox, stating that while the company is enthusiastic about its electric vehicles (EVs), it remains committed to disciplined growth.
Earlier this month, Barra acknowledged that GM would not meet its target 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 remain flexible and “build to demand,” although it did experience growth in EV sales last quarter.
Additionally, Barra disclosed that Cruise, GM’s autonomous vehicle subsidiary, will abandon its plans for the Origin vehicle and focus instead on using next-generation Chevrolet Bolts for testing in Texas and Arizona. GM recorded a $600 million expense associated with halting production of the Origin in Detroit.
During a call with analysts, Barra explained that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as its omission of a steering wheel. This pivot is expected to lower costs per unit and help GM make better use of its resources.
“Our vision to transform mobility using autonomous technology remains unchanged,” Barra asserted. “Every mile traveled, and every simulation, brings us closer to our goals as Cruise operates as an AI-first company.”
Moreover, GM is seeking to restructure its joint venture with SAIC Motor in China, as it continues to incur losses. The company reported a $104 million loss in the second quarter, and in June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% less than the prior year, according to industry sources.