General Motors has updated its financial projections for 2024, following an impressive second-quarter performance that exceeded Wall Street expectations.
The Detroit-based automaker has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase 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, though it slightly reduced its net income expectations for shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM’s revenue reached $47.9 billion, marking over a 7% increase from the previous year and surpassing Wall Street’s forecast of $45 billion, according to FactSet estimates. The company reported earnings per share of $3.06, exceeding analysts’ expectations of $2.71 and representing a 60% improvement compared to the same period in 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result, GM’s stock surged nearly 5% in pre-market trading on Tuesday, with the company’s shares climbing more than 37% this year. Following the market close on Monday, GM announced a third-quarter cash dividend, contributing to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra emphasized the success of GM’s gas-powered trucks and SUVs, and revealed plans for the launch of eight new or redesigned compact, mid-size, and full-size models in North America. Barra highlighted the ongoing production scaling of the electric Chevrolet Equinox and reassured shareholders about the company’s commitment to disciplined growth in electric vehicle (EV) production, despite acknowledging a market slowdown that may prevent GM from reaching its target of producing 1 million EVs in North America by the end of 2025.
Barra also announced a strategic shift for Cruise, GM’s self-driving unit, which has been reevaluating its operations since an incident last October. The company plans to discontinue the Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing its autonomous vehicles in Texas and Arizona. GM reported a $600 million charge due to halting production of the Origin in Detroit.
During an analyst call, Barra mentioned that switching to the Bolt would help address regulatory concerns regarding the Origin’s unconventional design, such as its lack of a steering wheel. This transition is expected to reduce costs per unit and help GM optimize resource allocation.
“Our vision to transform mobility using autonomous technology remains intact, and each mile traveled, along with every simulation, brings us closer to that goal since Cruise operates as an AI-first company,” Barra stated.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor, as it faces financial losses; the company recorded a $104 million loss in the second quarter. In June, production at SAIC-GM was cut by 70%, leading to the delivery of only 26,000 vehicles—50% less than the previous year, as reported by Automotive News.