General Motors has announced an increase in several financial projections for 2024 after exceeding Wall Street expectations in its second-quarter performance.
The Detroit-based automaker has raised its forecast for adjusted earnings to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has adjusted its targets for operating cash flow and earnings per share. However, expectations for net income attributable to shareholders have been slightly reduced by less than 1%, now projected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting an increase of more than 7% from the previous year and surpassing Wall Street’s expectations of $45 billion, according to FactSet estimates. The company’s earnings per share stood at $3.06, exceeding the anticipated $2.71 and marking a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday, with shares having increased more than 37% throughout the year. After the market closed on Monday, GM also declared a cash dividend for the third quarter, which contributed to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the successful performance of GM’s gasoline-powered trucks and SUVs, mentioning that the company is set to launch eight new or redesigned models across compact, mid-size, and full-size categories in North America. Barra emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox, stating the importance of disciplined volume growth despite the company’s excitement about electric vehicles (EVs) and their initial success.
Earlier this month, 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 slowdown in the market. The company has stressed the need for flexibility to “build to demand,” although it did see growth in EV sales last quarter.
Additionally, Barra revealed that Cruise, GM’s self-driving division that had to retract its operations following an incident last October, will abandon the Origin vehicle. Instead, Cruise will utilize the next-generation Chevrolet Bolt for vehicle testing in Texas and Arizona. This shift resulted in a $600 million charge related to halting production of the Origin in Detroit.
Barra stated that employing the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. The change is expected to reduce costs per unit and optimize resource allocation.
“Our vision to transform mobility using autonomous technology remains intact, and every mile traveled and every simulation takes us closer, as Cruise operates as an AI-first company,” Barra remarked.
Furthermore, GM is working to restructure its joint venture in China with SAIC Motor, as it continues to incur losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70% and managed to deliver 26,000 vehicles, which is 50% less than the previous year, according to Automotive News.