General Motors is adjusting its financial projections for 2024 following a strong performance in the second quarter that exceeded Wall Street predictions. The Detroit-based automaker has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders has been slightly lowered to between $10 billion and $11.4 billion.
In the second quarter, GM’s revenue reached $47.9 billion, reflecting a more than 7% increase from the same period last year and exceeding the $45 billion expected by analysts, according to FactSet. The company reported earnings per share of $3.06, surpassing the anticipated $2.71, and representing a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM stock rose nearly 5% in pre-market trading on Tuesday and has gained more than 37% throughout the year. The company also declared a cash dividend for the third quarter, contributing to the stock’s positive momentum.
In a communication to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs while noting the introduction of eight new or redesigned models across different vehicle sizes in North America. She emphasized the scaling of production for the electric Chevrolet Equinox, expressing the company’s commitment to consistent volume growth despite some challenges in electric vehicle production. Barra previously indicated that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market, though EV sales increased last quarter.
Furthermore, Barra announced that Cruise, GM’s autonomous driving division, will discontinue its Origin vehicle following operational setbacks last October. Instead, Cruise will concentrate on testing next-generation Chevrolet Bolts in Texas and Arizona. GM incurred a $600 million charge related to the halt of Origin production in Detroit.
During a call with analysts, Barra stated that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as the absence of a steering wheel. This decision aims to reduce unit costs and allow GM to optimize its resources.
GM is also working on reorganizing its joint venture with SAIC Motor in China due to ongoing financial losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, a 50% decline compared to the previous year, as reported by Automotive News.