General Motors is increasing its financial projections for 2024 after reporting impressive second-quarter results that exceeded Wall Street forecasts. The automaker now anticipates adjusted earnings for the year to be between $13 billion and $15 billion, a rise from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has increased its targets for operating cash flow and earnings per share, while net income expectations for shareholders have been slightly reduced to a range of $10 billion to $11.4 billion.
GM’s revenue for the second quarter reached $47.9 billion, marking a year-over-year increase of over 7% and surpassing the expected $45 billion. Earnings per share also outperformed expectations, coming in at $3.06 compared to the anticipated $2.71, representing a 60% increase from 2023. The company’s net income grew by 14%, rising from $2.5 billion to $2.9 billion.
Following the announcement, GM’s stock surged nearly 5% in pre-market trading, reflecting an overall increase of more than 37% this year. In conjunction with trading results, GM declared a cash dividend for the third quarter, further elevating investor sentiment.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, mentioning plans to launch eight new or redesigned vehicle models in North America. She also discussed the production scaling of the electric Chevrolet Equinox, emphasizing a commitment to responsible growth in electric vehicle production despite acknowledging that the company will not meet its target of producing one million electric vehicles in North America by the end of 2025 due to market slowdowns.
Furthermore, Barra detailed a strategic pivot for Cruise, GM’s autonomous driving unit, which will now focus on the next-generation Chevrolet Bolt after discontinuing the Origin vehicle to mitigate regulatory concerns and production costs.
GM is also working to restructure its joint venture in China with SAIC Motor, a partnership facing challenges resulting in significant losses. The joint venture saw production cuts of 70% in June, with vehicle deliveries plummeting by 50% compared to the previous year.
This proactive approach by GM showcases the company’s agility in adapting to market conditions while maintaining its commitment to innovative vehicle production, both in traditional and electric sectors. With a focus on disciplined growth and strategic pivots, GM appears poised to navigate current challenges effectively, promising an optimistic future for its stakeholders and the industry at large.