General Motors has raised several of its financial outlooks for 2024 after exceeding Wall Street’s predictions for its second quarter. The Detroit-based automaker has increased its expected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. It has also revised its targets for operating cash flow and earnings per share. Meanwhile, the forecast for net income attributable to shareholders has been slightly adjusted down by less than 1%, now estimated between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year and surpassing the $45 billion projected by Wall Street analysts, as per FactSet data. Earnings per share stood at $3.06, exceeding the anticipated $2.71 and reflecting a 60% rise from 2023. Net income also saw a 14% growth, rising to $2.9 billion from $2.5 billion last year.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to an overall rise of over 37% for the year. Additionally, GM declared a cash dividend for the third quarter, further boosting its share price.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, stating that GM is planning to launch eight new or redesigned models across compact, mid-size, and full-size categories in North America. She also discussed the ramp-up of production for the electric Chevrolet Equinox, emphasizing the company’s commitment to controlled growth in electric vehicle (EV) volume, despite earlier acknowledgments that GM will not reach its target of producing 1 million EVs in North America by the end of 2025 due to a market slowdown.
Furthermore, Barra announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle model and instead focus on utilizing the next-generation Chevrolet Bolt for vehicle tests in Texas and Arizona. This strategic shift comes after Cruise had to scale back its operations following an incident last October, with GM incurring a $600 million charge related to the production halt of the Origin.
During an analyst call, Barra noted that using the Bolt should alleviate regulatory concerns associated with the Origin’s distinctive design, which lacked a steering wheel. She emphasized that this change would reduce costs per unit and help optimize GM’s resources.
Barra reaffirmed GM’s vision of transforming mobility through autonomous technology, stating that “every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company.” Additionally, GM is looking to restructure its joint venture in China with SAIC Motor due to ongoing financial losses, reporting a $104 million loss for the second quarter. Recently, SAIC-GM reduced production by 70%, leading to the delivery of 26,000 vehicles, which is a 50% decline compared to the previous year.