General Motors has revised its financial projections for 2024 following stronger-than-expected performance in the second quarter, exceeding Wall Street’s forecasts.
The Detroit-based automaker has increased its estimated adjusted earnings for the year to a range of $13 billion to $15 billion, a rise from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly downgrading its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a reduction of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the year prior and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding the anticipated $2.71 per share and reflecting a 60% increase compared to 2023. The company also saw a 14% rise in net income, totaling $2.9 billion, up from $2.5 billion.
The stock of GM surged nearly 5% in pre-market trading on Tuesday and has experienced a year-to-date increase of over 37%. Following the close of trading on Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of their gas-powered trucks and SUVs, revealing plans to launch eight new or redesigned models across various sizes in North America. She emphasized GM’s commitment to electric vehicle (EV) production with the upcoming Chevrolet Equinox, while also acknowledging a recent slowdown in the market that would prevent the company from reaching its goal of producing 1 million EVs in North America by the end of 2025. Despite this, EV sales rose in the last quarter.
Barra also announced a shift in strategy for Cruise, GM’s self-driving division. The company decided to discontinue the Origin vehicle following a suspension of operations after an incident last year, opting instead to utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM recorded a $600 million charge related to the paused production of the Origin in Detroit.
Barra addressed regulatory concerns regarding the Origin’s unconventional design, stating that using the Bolt would mitigate these issues. This shift is expected to reduce costs per unit and enable better resource allocation.
“Our vision to transform mobility through autonomous technology remains intact, as each mile and simulation brings us closer to our goals, advancing Cruise as an AI-first company,” Barra stated.
Moreover, GM is working to restructure its joint venture with SAIC Motor in China due to ongoing financial losses, which amounted to a $104 million deficit in the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles—50% less than the previous year, according to Automotive News.