General Motors is adjusting its financial projections for 2024 following strong performance that exceeded Wall Street’s expectations in the second quarter.
The Detroit-based automaker has raised its estimated adjusted earnings for the year to between $13 billion and $15 billion, an increase from previous estimates of $12.5 billion to $14.5 billion. Additionally, GM has heightened its targets for operating cash flow and earnings per share, while slightly reducing its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a rise of over 7% from the previous year and exceeding Wall Street’s forecast of $45 billion. Earnings per share reached $3.06, surpassing analysts’ predictions of $2.71 and reflecting a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock saw a nearly 5% increase in pre-market trading, with shares climbing more than 37% this year. The company also declared a cash dividend for the third quarter after trading closed Monday, contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She noted that the company is launching eight new or redesigned models across various categories in North America while also ramping up production of the electric Chevrolet Equinox. Barra emphasized GM’s commitment to disciplined volume growth in the electric vehicle market, despite previously stating that the automaker would not meet its target of producing 1 million electric vehicles in North America by 2025 due to a market slowdown.
Additionally, Barra announced changes for Cruise, GM’s self-driving unit, which will drop its planned Origin vehicle in favor of the next-generation Chevrolet Bolt for testing in Texas and Arizona. This shift comes after Cruise faced operational setbacks after an incident in October, resulting in a $600 million charge related to halting production of the Origin.
During a call with analysts, Barra indicated that using the Bolt would address regulatory concerns surrounding the design of the Origin, which lacked a steering wheel. This change is expected to reduce per unit costs and help GM optimize its resources.
Furthermore, GM is working on restructuring its joint venture with SAIC Motor in China, as it continues to face financial losses. The company reported a $104 million loss for the second quarter, with SAIC-GM halving vehicle deliveries to 26,000, a 50% decrease from the previous year.