General Motors has revised its financial projections for 2024 following a strong performance in the second quarter that exceeded Wall Street predictions. The company has increased its expected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. It also raised its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% rise from the previous year and surpassing the anticipated $45 billion, according to FactSet estimates. Earnings per share stood at $3.06, exceeding the projected $2.71 and representing a 60% increase compared to 2023. Net income increased by 14% to $2.9 billion, up from $2.5 billion.
The company’s stock rose nearly 5% in pre-market trading and has seen an impressive increase of over 37% this year. After the market closed on Monday, GM also announced a cash dividend for the third quarter, which contributed to the stock’s boost.
In a message to shareholders, CEO Mary Barra highlighted the strong sales of gas-powered trucks and SUVs and revealed plans to launch eight new or updated models across compact, mid-size, and full-size categories in North America. She emphasized GM’s commitment to disciplined growth in electric vehicle (EV) production as the company ramps up production of the Chevrolet Equinox but acknowledged that GM would not meet its target of producing 1 million EVs in North America by the end of 2025 due to a slowdown in the market. The company intends to adopt a flexible production strategy based on demand, although EV sales did increase last quarter.
Barra also announced that Cruise, GM’s self-driving division that paused its operations following an incident last October, will discontinue its Origin vehicle project. Instead, Cruise will use the next-generation Chevrolet Bolt for testing in Texas and Arizona. This shift comes after GM incurred a $600 million charge related to the Origin’s halted production in Detroit.
Discussing the decision, Barra mentioned that utilizing the Bolt would address regulatory concerns about the unique design of the Origin, which lacks a steering wheel. This change is expected to reduce costs per unit and optimize resource allocation.
“Our vision to transform mobility through autonomous technology remains intact, and each mile traveled and every simulation brings us closer to our goal as Cruise operates as an AI-first company,” Barra stated.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor as it faces ongoing losses, reporting a $104 million loss for the second quarter. Production at SAIC-GM was reduced by 70% in June, resulting in only 26,000 vehicle deliveries, a 50% decline compared to the previous year.