General Motors is raising its financial outlook for 2024 following a significantly strong performance in the second quarter, surpassing Wall Street’s expectations. The automotive giant has adjusted its projected adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. They have also elevated their targets for operating cash flow and earnings per share, while slightly lowering projections for net income attributable to shareholders by less than 1%, now estimating it to be between $10 billion and $11.4 billion.
In terms of revenue, GM reported $47.9 billion for the second quarter, marking over a 7% increase from the last year and exceeding the anticipated $45 billion from Wall Street. Earnings per share were reported at $3.06, surpassing the forecast of $2.71 and reflecting an impressive 60% growth compared to 2023. Additionally, net income rose by 14% to $2.9 billion, up from $2.5 billion.
In pre-market trading, GM’s stock soared nearly 5% and has experienced over a 37% increase this year. Following trading hours on Monday, the company declared a cash dividend for the third quarter, contributing to a positive market reaction.
In her communication to shareholders, CEO Mary Barra expressed pride in the success of GM’s gas-powered trucks and SUVs, while also highlighting the launch of eight new or redesigned models in North America. Barra elaborated on the production ramp-up for the electric Chevrolet Equinox and emphasized their commitment to disciplined growth with electric vehicles (EVs), although she admitted that GM would not meet the target of producing 1 million EVs in North America by the close of 2025 due to a market slowdown. Nevertheless, there was a noted increase in EV sales last quarter.
Moreover, Barra shared changes in GM’s self-driving division, Cruise, which will move away from the Origin vehicle to concentrate on the next-generation Chevrolet Bolt for testing in Texas and Arizona. This pivot follows a $600 million charge related to the halting of Origin production in Detroit, and it aims to align with regulatory concerns regarding the vehicle’s unique design, such as the absence of a steering wheel.
“We remain dedicated to transforming mobility with autonomous technology,” Barra said, highlighting the incremental progress made through every simulation and mile traveled.
Additionally, GM is restructuring a joint venture in China with SAIC Motor amidst continuous losses, including a reported $104 million loss for the second quarter. SAIC-GM had cut production by 70% in June, leading to a delivery of 26,000 vehicles, which is half of what was delivered previously.
Overall, GM’s recent financial success and its strategic pivots in both the EV market and autonomous vehicle testing demonstrate a proactive approach as the company navigates industry challenges. The positive adjustments in financial targets reflect the company’s resilience and long-term vision for growth in a rapidly changing automotive landscape.