General Motors has updated its financial outlook for 2024 after exceeding Wall Street’s expectations in the second quarter. The company now forecasts adjusted earnings between $13 billion and $15 billion, revised from an earlier range of $12.5 billion to $14.5 billion. Additionally, GM has increased its targets for operating cash flow and earnings per share, while slightly lowering the net income estimates for shareholders to a range of $10 billion to $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, which is more than a 7% increase compared to last year and surpassing the $45 billion that analysts had anticipated. Earnings per share reached $3.06, exceeding the expected $2.71, and marking a 60% increase from the previous year. The net income rose 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock surged nearly 5% in pre-market trading, having increased over 37% throughout the year. The company also declared a cash dividend for the third quarter, contributing to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and announced the introduction of eight new or redesigned models across various categories in North America. Barra mentioned that GM is ramping up production of the electric Chevrolet Equinox and emphasized the company’s commitment to disciplined volume growth, despite earlier comments about a delay in meeting the goal of producing 1 million electric vehicles by the end of 2025 due to a market slowdown.
Barra also disclosed that GM’s self-driving unit, Cruise, would discontinue its Origin vehicle project, which had faced operational setbacks following an incident last year. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the production halt of the Origin in Detroit.
During a call with analysts, Barra stated that transitioning to the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as its lack of a steering wheel. This shift is expected to lower costs and improve resource allocation.
Barra reiterated GM’s commitment to transforming mobility with autonomous technologies, asserting that progress is being made with each mile and simulation. Meanwhile, GM is restructuring its joint venture in China with SAIC Motor amidst ongoing losses, reporting a $104 million loss for the second quarter, as production was cut by 70% with only 26,000 vehicles delivered, representing a 50% decline from the previous year.