General Motors has increased its financial projections for 2024 after exceeding Wall Street’s expectations for the second quarter. The Detroit-based automaker has revised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has 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 revenues of $47.9 billion, marking a more than 7% increase year-over-year and surpassing Wall Street’s expectations of $45 billion, according to FactSet estimates. The company’s earnings per share reached $3.06, exceeding analysts’ forecasts of $2.71 per share and reflecting a 60% increase from the previous year. Net income rose by 14%, amounting to $2.9 billion compared to $2.5 billion last year.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, demonstrating a year-to-date increase of more than 37%. Additionally, GM announced a third-quarter cash dividend after the close of trading on Monday, contributing to the stock’s rise.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs and mentioned plans to launch eight new or redesigned vehicle models in North America. She emphasized the ramp-up of production for the electric Chevrolet Equinox, stating that while GM is excited about its electric vehicle initiatives, the company remains committed to disciplined growth.
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company plans to be flexible and “build to demand,” although its electric vehicle sales did witness an increase in the last quarter.
Furthermore, Barra announced that Cruise, GM’s self-driving division, will discontinue its Origin vehicle project after pausing operations due to an incident last October. Instead, Cruise will focus on employing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge associated with halting production of the Origin in Detroit.
During a call with analysts, Barra expressed that utilizing the Bolt would address regulatory concerns regarding the Origin’s unconventional design, including its lack of a steering wheel. This shift is expected to reduce costs per unit and optimize GM’s resources.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, noting that each mile traveled and simulation conducted is bringing the company closer to this vision. Additionally, GM is working to restructure its joint venture with SAIC Motor in China due to ongoing losses, which included a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, a 50% decrease compared to the previous year.