General Motors has updated its financial projections for 2024 after exceeding Wall Street’s expectations in the second quarter. The Detroit-based automaker has revised its anticipated adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM raised its targets for operating cash flow and earnings per share, while slightly lowering the expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, a rise of more than 7% compared to the same period last year, surpassing the forecast of $45 billion by Wall Street analysts. Earnings per share reached $3.06, exceeding the analyst estimate of $2.71 and reflecting a 60% increase from 2023. Net income grew by 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, reflecting a year-to-date increase of over 37%. After markets closed on Monday, the company announced a third-quarter cash dividend, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, mentioning the upcoming launch of eight new or redesigned models across compact, mid-size, and full-size segments in North America. Barra emphasized the increased production of the electric Chevrolet Equinox, stating the company’s commitment to disciplined volume growth despite excitement over its electric vehicles.
Earlier in the month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The automaker plans to remain adaptable and will “build to demand,” although electric vehicle sales did experience growth last quarter.
Barra also announced a strategic shift for Cruise, GM’s self-driving unit, which will discontinue its Origin vehicle. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the discontinuation of the Origin’s production in Detroit.
Barra noted that using the Bolt could address regulatory concerns regarding the Origin’s distinct design, which lacked a steering wheel, and could also reduce costs and optimize resources for GM.
“Our vision to transform mobility using autonomous technology remains unchanged,” Barra stated. “Every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company.”
Furthermore, GM is working to restructure its joint venture in China with SAIC Motor due to ongoing losses, reporting a $104 million loss in the second quarter. SAIC-GM significantly reduced production by 70% in June, delivering only 26,000 vehicles, a 50% decrease from the previous year, according to industry reports.