General Motors has adjusted several of its financial projections for 2024 following a strong performance that exceeded Wall Street forecasts in the second quarter.
The Detroit-based automaker has increased its estimated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. It also raised its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders by less than 1%, now projected between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% compared to the same period last year and surpassing Wall Street’s expectations of $45 billion, as per FactSet estimates. The earnings per share were reported at $3.06, ahead of the anticipated $2.71, and 60% higher than last year. Net income grew 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to an overall increase of over 37% this year. The company announced a third-quarter cash dividend after the close of trading on Monday, further boosting its stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and noted that the company is preparing to launch eight new or redesigned models in North America. She emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox while also expressing excitement over the company’s early successes in the electric vehicle (EV) sector, pledging disciplined growth.
Barra also indicated earlier this month that GM will not reach its goal of producing 1 million electric vehicles in North America by the end of 2025, citing a recent slowdown in the market. The company has maintained it will adapt production according to demand, even though EV sales experienced growth last quarter.
Additionally, Barra announced that GM’s self-driving division, Cruise, will discontinue its Origin vehicle after previously scaling back operations due to an incident last October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the suspension of Origin production in Detroit.
During a call with analysts, Barra explained that the decision to use the Bolt would address regulatory concerns regarding the Origin’s unconventional design, which included the absence of a steering wheel. This shift is expected to reduce costs per unit and help optimize GM’s resources.
“Our vision to transform mobility using autonomous technology remains intact, and every mile driven and simulation completed brings us closer to that goal,” Barra stated.
GM is also working to restructure its joint venture in China with SAIC Motor, following financial losses, with a reported $104 million loss for the second quarter. In June, production at SAIC-GM was cut by 70%, leading to a delivery of 26,000 vehicles, which is 50% less than the same period last year, according to Automotive News.