General Motors has adjusted its financial projections for 2024 following impressive results that exceeded Wall Street forecasts for its second quarter.
The Detroit-based automaker has revised its expected adjusted earnings for the year to range between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. GM also raised its targets for operating cash flow and earnings per share, while slightly decreasing its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a growth of more than 7% compared to last year and surpassing Wall Street’s anticipated $45 billion, as per FactSet estimates. Earnings per share reached $3.06, exceeding analysts’ expectations of $2.71 per share and marking a 60% increase from 2023. Net income rose by 14%, totaling $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock saw an almost 5% increase in pre-market trading on Tuesday and has recorded a rise of over 37% this year. The company also declared a third-quarter cash dividend, further boosting investor confidence.
During a letter to shareholders, CEO Mary Barra emphasized the company’s strong performance with its gas-powered trucks and SUVs, noting that GM plans to introduce eight new or redesigned models in North America. Barra highlighted the company’s commitment to scaling production of the electric Chevrolet Equinox, stating their excitement for electric vehicles while maintaining a focus on disciplined growth.
Earlier in the month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns. The company indicated it would adapt by “building to demand,” despite experiencing growth in EV sales last quarter.
In relation to its self-driving unit, Cruise, which had to scale back operations due to a previous incident, Barra announced the company would abandon its Origin vehicle project. Instead, Cruise plans to utilize the next-generation Chevrolet Bolt for vehicle testing in Texas and Arizona. This shift comes alongside a $600 million charge taken by GM due to the halt in Origin production in Detroit.
During an analyst call, Barra indicated that using the Bolt would mitigate any regulatory concerns regarding the Origin’s distinct design, which notably lacks a steering wheel. This change is expected to lower costs per unit and enhance resource optimization.
Barra reiterated GM’s vision of transforming mobility through autonomous technology, emphasizing that “Cruise is an AI-first company” and that each mile traveled and simulation brings them closer to their goals.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor amid ongoing losses, having reported a $104 million loss for the second quarter. SAIC-GM cut production by 70% in June, delivering only 26,000 vehicles, which is 50% less than the previous year, according to Automotive News.