General Motors has revised its financial projections for 2024 after exceeding Wall Street predictions for its second-quarter performance.
The automaker has raised its expected adjusted earnings for the year to a range of $13 billion to $15 billion, up from previous estimates of $12.5 billion to $14.5 billion. Additionally, it has increased targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders has been slightly decreased by less than 1%, now projected to be between $10 billion and $11.4 billion.
In its second quarter, GM reported revenue of $47.9 billion, a rise of over 7% from the previous year and above Wall Street’s expected $45 billion. Earnings per share were reported at $3.06, surpassing analysts’ predictions of $2.71 per share and demonstrating a 60% increase compared to 2023. The company’s net income for the quarter was $2.9 billion, marking a 14% increase from the previous year’s $2.5 billion.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has seen more than a 37% increase in value this year. Additionally, GM declared a third-quarter cash dividend after market close on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She also mentioned the launch of eight new or redesigned vehicle models across various categories in North America. Barra affirmed the company’s commitment to disciplined volume growth as it ramps up production of the electric Chevrolet Equinox, acknowledging the excitement surrounding their electric vehicles while adjusting expectations for growth amid a slowing market. Earlier this month, Barra noted that GM may not reach its goal of producing 1 million electric vehicles in North America by the end of 2025.
Furthermore, Barra revealed that Cruise, GM’s self-driving unit, will discontinue its Origin vehicle model and instead focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This change comes after Cruise had to scale back operations due to a previous incident. GM took a $600 million charge associated with halting production of the Origin.
Barra stated that utilizing the Bolt may help address regulatory concerns regarding the Origin’s distinct design features, such as the absence of a steering wheel. She emphasized that this strategy would also reduce unit costs and aid in resource optimization.
GM is also working to restructure its joint venture in China with SAIC Motor amid ongoing losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, a 50% decrease compared to the same period last year.