General Motors has announced an increase in its financial projections for 2024 after exceeding Wall Street’s expectations for the second quarter. The automaker now anticipates adjusted earnings for the year to fall between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its forecasts for operating cash flow and earnings per share, although expectations for net income attributable to shareholders have seen a slight decrease of less than 1%, to a range of $10 billion to $11.4 billion.
GM reported second-quarter revenue of $47.9 billion, reflecting a more than 7% increase from the previous year and surpassing Wall Street’s forecast of $45 billion, according to FactSet estimates. Earnings per share were $3.06, which exceeded the analysts’ expectation of $2.71 and represented a 60% increase compared to 2023. The company’s net income rose 14%, reaching $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock increased nearly 5% in pre-market trading on Tuesday and has recorded a rise of more than 37% this year. The company also declared a cash dividend for the third quarter, contributing to the stock’s positive momentum.
In her letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gasoline-powered trucks and SUVs. She announced plans to launch eight new or redesigned vehicle models across different sizes in North America. Barra also mentioned the scaling up of production for the electric Chevrolet Equinox, emphasizing a commitment to cautious yet steady growth in electric vehicle (EV) offerings.
However, Barra clarified that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market. The company intends to be adaptive and produce vehicles based on demand, despite a growth in EV sales from the previous quarter.
In a significant shift for GM’s self-driving unit, Cruise, Barra stated that the company will discontinue the development of its Origin vehicle, refocusing efforts on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge for pausing the production of the Origin in Detroit. During a conference call, Barra indicated that using the Bolt would address regulatory concerns regarding the Origin’s unusual design, which lacked a traditional steering wheel. This adjustment is expected to reduce costs and enhance resource allocation.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, highlighting the ongoing relevance of each mile traveled and simulation towards this vision. The company is also working on restructuring its joint venture in China with SAIC Motor, as it continues to face financial losses, including a $104 million loss in the second quarter. SAIC-GM significantly reduced production in June, delivering 26,000 vehicles, which marks a 50% decline compared to the same period last year.