General Motors has increased its financial projections for 2024 following strong performance in the second quarter that exceeded Wall Street expectations. The automaker has raised its anticipated adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has updated its targets for operating cash flow and earnings per share, while slightly reducing 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, a more than 7% increase compared to the same period last year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. The earnings per share reached $3.06, outperforming analyst predictions of $2.71 and marking a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock saw a nearly 5% rise in pre-market trading on Tuesday, with the company’s shares climbing more than 37% this year. The stock received an additional boost after GM declared a third-quarter cash dividend after trading closed on Monday.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs and revealed plans to launch eight new or redesigned compact, mid-size, and full-size models in North America. She also mentioned the ramp-up in production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in electric vehicle production.
However, Barra noted that GM does not expect to meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The automaker has stated it will remain flexible and adapt production to meet demand, although EV sales saw growth in the last quarter.
Furthermore, Barra announced that Cruise, GM’s self-driving unit, will no longer pursue its Origin vehicle and will instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This move follows a previous incident that necessitated a rollback in Cruise’s operations. GM incurred a $600 million charge related to halting production of the Origin in Detroit, and Barra explained that using the Bolt will address regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel.
The transition to the Bolt is expected to reduce per-unit costs and optimize resources for the company. Barra reinforced GM’s commitment to advancing mobility through autonomous technology, emphasizing that each mile traveled and simulation gets the company closer to its goals.
Lastly, GM is working to restructure its joint venture in China with SAIC Motor while continuing to face challenges, reporting a $104 million loss in the second quarter. In June, SAIC-GM significantly cut production by 70%, resulting in the delivery of 26,000 vehicles, which is 50% less than the previous year, according to reports.