General Motors has revised its financial projections for 2024 after exceeding Wall Street’s expectations in the second quarter. The company now anticipates adjusted earnings between $13 billion and $15 billion, an increase from the prior estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, although it slightly reduced its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, marking over a 7% increase from the previous year and surpassing the anticipated $45 billion. The earnings per share stood at $3.06, exceeding analyst predictions of $2.71 and reflecting a 60% rise from 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock surged nearly 5% in pre-market trading and has increased over 37% this year. The company also declared a cash dividend for the third quarter, contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra emphasized the success of GM’s gas-powered trucks and SUVs and announced plans to introduce eight new or redesigned models in North America. She also highlighted the ramp-up of production for the electric Chevrolet Equinox, expressing enthusiasm for their electric vehicle (EV) initiatives while committing to disciplined growth in production.
Despite this optimism, Barra indicated that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company plans to build according to demand, even as its EV sales saw an increase in the last quarter.
Barra also revealed that Cruise, GM’s autonomous vehicle division, will discontinue its Origin vehicle and instead shift focus to the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM recorded a $600 million charge related to the cessation of Origin production.
During an analyst call, Barra explained that utilizing the Bolt aims to address regulatory concerns regarding the unique design of the Origin, which did not include a steering wheel. This strategic pivot is expected to reduce costs per unit and help optimize GM’s resources.
Furthermore, GM is working to restructure its joint venture with SAIC Motor in China amid ongoing losses, reporting a $104 million loss for the second quarter. In June, the SAIC-GM partnership reduced production by 70%, resulting in the delivery of just 26,000 vehicles, which is 50% lower than the previous year.