General Motors is adjusting its financial projections for 2024 following a strong performance that exceeded Wall Street’s expectations for the second quarter. The company has increased its anticipated adjusted earnings range for the year to between $13 billion and $15 billion, an upgrade from the previous forecast of $12.5 billion to $14.5 billion. It has also raised targets for operating cash flow and earnings per share. However, the expectation 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, marking a more than 7% increase compared to the same period last year and surpassing the $45 billion anticipated by analysts, according to FactSet estimates. The earnings per share reached $3.06, exceeding analyst expectations of $2.71 per share and showing a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
In response to these results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to an increase of over 37% in the stock’s value this year. Additionally, GM declared a cash dividend for the third quarter, which further supported the stock price.
In a letter to shareholders, CEO Mary Barra emphasized the success of GM’s gas-powered trucks and SUVs and mentioned the launch of eight new or redesigned vehicle models in North America. She also highlighted the company’s scaling production of the electric Chevrolet Equinox, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
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 market slowdown, but stated the company would remain flexible and “build to demand,” noting an increase in EV sales in the previous quarter.
Additionally, Barra revealed that Cruise, GM’s self-driving unit, would no longer proceed with its Origin vehicle and instead focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This change comes after Cruise was compelled to scale back operations following an incident last October. GM incurred a $600 million charge associated with halting Origin production.
During a conference call with analysts, Barra indicated that utilizing the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as the absence of a steering wheel. She added that this decision would reduce costs per unit and optimize resources.
“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,” Barra stated.
GM is also working to restructure its joint venture in China with SAIC Motor, as the company continues to face losses, including a $104 million loss reported in the second quarter. SAIC-GM significantly reduced production by 70% in June, delivering only 26,000 vehicles, which is a 50% decrease from the previous year, according to Automotive News.