General Motors has elevated several financial projections for 2024 after exceeding Wall Street forecasts in its second quarter results.
The Detroit-based automaker now anticipates adjusted earnings for the year to fall between $13 billion and $15 billion, an increase from its previous estimate of $12.5 billion to $14.5 billion. It has also raised its targets for operating cash flow and earnings per share, while slightly reducing its expectations for net income attributable to shareholders to a range of $10 billion to $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, which marks a rise of over 7% from the previous year and surpasses Wall Street’s expected $45 billion. Earnings per share were recorded at $3.06, exceeding analysts’ predictions of $2.71 and representing a 60% increase from 2023. Additionally, net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result of these promising figures, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has increased by more than 37% since the beginning of the year. Following the close of trading on Monday, GM announced a cash dividend for the third quarter, which also contributed to the stock’s uptick.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, and emphasized that the company is set to launch eight new or redesigned compact, mid-size, and full-size models across North America. She mentioned that production of the electric Chevrolet Equinox is ramping up, expressing confidence in the company’s electric vehicle (EV) strategy while emphasizing a disciplined approach to growth.
Earlier this month, Barra acknowledged that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns. The company has indicated a flexible approach, stating it aims to “build to demand,” even as EV sales rose in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle project in favor of utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This change follows a $600 million charge related to the halted production of the Origin in Detroit.
Barra explained that transitioning to the Bolt would address regulatory concerns regarding the unique design of the Origin, including its absence of a steering wheel. This shift is anticipated to reduce unit costs and enhance resource optimization.
She reaffirmed GM’s commitment to transforming mobility through autonomous technology, asserting that every journey and simulation brings the company closer to its goals, stating, “Cruise is an AI-first company.”
Furthermore, GM is working to restructure its joint venture in China with SAIC Motor as it continues to experience losses; the company reported a $104 million loss for the second quarter. In June, the SAIC-GM joint venture reduced production by 70%, delivering 26,000 vehicles, which is a 50% decrease compared to the previous year.