General Motors is increasing several financial projections for 2024 after exceeding Wall Street expectations in its second-quarter performance.
The automaker has elevated its forecast for adjusted earnings for the year to between $13 billion and $15 billion, revised from a prior range of $12.5 billion to $14.5 billion. In addition, GM has raised its targets for operating cash flow and earnings per share, while slightly lowering its expectations for net income attributable to shareholders to a range of $10 billion to $11.4 billion.
The company’s revenue for the second quarter reached $47.9 billion, reflecting an increase of over 7% compared to the previous year and surpassing Wall Street’s estimate of $45 billion, according to FactSet. Earnings per share were reported at $3.06, exceeding the expected $2.71 and representing a 60% increase from 2023. Net income also grew by 14% to $2.9 billion, up from $2.5 billion.
Following this announcement, GM’s stock rose nearly 5% in pre-market trading on Tuesday, with the stock climbing more than 37% this year. Additionally, GM declared a cash dividend for the third quarter after market close on Monday, which likely contributed to the stock’s upward movement.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She mentioned that the company is launching eight new or redesigned compact, mid-size, and full-size vehicles in North America and is ramping up production of the electric Chevrolet Equinox. Barra expressed the company’s commitment to disciplined growth in electric vehicle (EV) production despite earlier forecasts being adjusted. Barra stated that GM will adapt to market conditions, confirming the growth of EV sales in the last quarter.
Barra also announced that Cruise, GM’s self-driving division, will discontinue its Origin vehicle, which had its operations curtailed after an incident last October. Instead, Cruise will focus on testing with the next-generation Chevrolet Bolt in Texas and Arizona. GM recorded a $600 million charge related to the Origin’s production halt in Detroit.
In discussions with analysts, Barra mentioned that using the Bolt would address regulatory concerns regarding the unique design of the Origin, including its absence of a steering wheel. This shift is anticipated to reduce costs per unit and help GM optimize its resources.
Furthermore, GM is working to restructure its joint venture in China with SAIC Motor as it continues to experience losses, including a reported $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, which is a 50% decline compared to the previous year, according to Automotive News.