General Motors has revised its financial projections for 2024 after exceeding expectations for its second quarter, significantly impressing Wall Street. The automaker has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has also raised its expected targets for operating cash flow and earnings per share, while slightly reducing the outlook for net income attributable to shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
The company’s revenue for the second quarter reached $47.9 billion, marking an increase of over 7% year-on-year, and surpassing the $45 billion projected by analysts. Earnings per share stood at $3.06, exceeding the expected $2.71 and representing a 60% rise compared to 2023. Net income also saw a 14% increase, rising to $2.9 billion from $2.5 billion.
Following this announcement, GM’s stock surged nearly 5% in pre-market trading, and the stock has risen over 37% throughout the year. The company declared a third-quarter cash dividend after market close on Monday, further boosting investor confidence.
In a communication to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs and mentioned the company is in the process of launching eight new or redesigned models across various categories in North America. Barra emphasized GM’s commitment to controlled growth in electric vehicle production as the company scales up production of the electric Chevrolet Equinox.
Despite earlier aspirations to produce 1 million electric vehicles in North America by the end of 2025, Barra acknowledged that GM will not meet this target due to a slowdown in the market. The company has indicated a willingness to adjust production according to demand, with EV sales showing growth in the last quarter.
Barra also revealed that Cruise, GM’s autonomous driving unit, has decided to abandon its Origin vehicle following a previous operational rollback due to an incident last October. Instead, Cruise will concentrate on testing its next-generation Chevrolet Bolt in Texas and Arizona. GM incurred a $600 million charge related to the discontinuation of the Origin’s production in Detroit.
During a conference call with analysts, Barra explained that shifting to the Bolt would address regulatory concerns regarding the Origin’s unconventional design, which does not include a steering wheel. This pivot is also expected to reduce production costs and optimize GM’s resource allocation.
Barra reaffirmed GM’s commitment to evolving mobility through autonomous technology, stating that “every mile traveled, and every simulation, brings us closer” to achieving this vision, as Cruise operates as an AI-driven company.
Furthermore, GM is working to restructure its joint venture in China with SAIC Motor, as it faces ongoing losses, which included a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, resulting in the delivery of 26,000 vehicles, a drop of 50% compared to the previous year, according to industry reports.