General Motors has increased several of its financial projections for 2024 after exceeding Wall Street’s expectations for its second-quarter results.
The Detroit-based automaker has raised its anticipated adjusted earnings for the fiscal year to a range of $13 billion to $15 billion, up from an earlier estimate of $12.5 billion to $14.5 billion. Additionally, GM has adjusted its targets for operating cash flow and earnings per share. The prediction for net income attributable to shareholders was reduced slightly, now expected to be between $10 billion and $11.4 billion.
In the second quarter, GM’s revenue reached $47.9 billion, reflecting an increase of more than 7% compared to the previous year and surpassing the $45 billion that Wall Street analysts had predicted, according to FactSet estimates. The company’s earnings per share were reported at $3.06, compared to the anticipated $2.71, and represented a 60% increase from 2023. Net income for the quarter rose 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading on Tuesday, with shares rising over 37% throughout the year. After the market closed on Monday, the company declared a third-quarter cash dividend, contributing to the stock’s rise.
In a communication to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and announced that the company is launching eight new or redesigned models across various segments in North America. She also mentioned the scaling production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in electric vehicle production.
Despite earlier goals, Barra noted that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, attributing the setback to a market slowdown. However, the company has expressed a willingness to adapt and “build to demand,” with EV sales having increased in the last quarter.
In another development, Barra indicated that GM’s self-driving unit, Cruise, would discontinue its unique Origin vehicle following last year’s operational setbacks and instead focus on deploying the next-generation Chevrolet Bolt for testing in Texas and Arizona. The company incurred a $600 million charge related to the halt in production of the Origin.
During an analyst call, Barra stated that utilizing the Bolt would mitigate regulatory concerns regarding the Origin’s design and reduce production costs. She reaffirmed GM’s commitment to advancing autonomous technology, describing Cruise as an AI-first company.
Moreover, GM is looking to restructure its joint venture in China with SAIC Motor, as the partnership has reported losses, including a $104 million loss for the second quarter. Production was cut by 70% in June, resulting in the delivery of only 26,000 vehicles—down 50% from the previous year, according to Automotive News.