General Motors has made significant adjustments to its financial projections for 2024, following a strong performance in the second quarter that surpassed Wall Street’s expectations. The Detroit-based automaker has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has upped its targets for operating cash flow and earnings per share, while slightly reducing the expected net income attributable to shareholders to between $10 billion and $11.4 billion.
In terms of revenue, GM reported $47.9 billion for the second quarter, which represents a more than 7% increase year-over-year and exceeds the expected $45 billion according to FactSet estimates. Earnings per share were reported at $3.06, surpassing the anticipated $2.71 per share by analysts and up 60% from 2023. Moreover, net income rose by 14%, reaching $2.9 billion, compared to $2.5 billion in the same quarter the previous year.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, reflecting a remarkable climb of over 37% in value since the beginning of the year. In light of its strong financial health, GM also declared a cash dividend for the third quarter, further boosting investor confidence.
CEO Mary Barra highlighted the company’s robust sales of gas-powered trucks and SUVs, along with the upcoming launch of eight new or redesigned vehicle models across various categories in North America. Additionally, Barra discussed the scaling of production for the electric Chevrolet Equinox and emphasized GM’s commitment to disciplined growth in electric vehicle (EV) production.
Despite the optimism, Barra acknowledged that GM will not meet its target of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market. However, she assured shareholders that the company remains flexible and will adapt its production to meet demand. Notably, EV sales did experience growth last quarter.
In a strategic pivot, GM is also stepping back from the Cruise self-driving unit’s initial plans for the Origin vehicle, due to production setbacks and regulatory concerns. Instead, Cruise will focus on testing next-generation Chevrolet Bolt vehicles in Texas and Arizona. This shift is expected to lower costs and optimize resources while maintaining GM’s vision of transforming mobility through autonomous technology.
Challenges remain for GM, particularly in its joint venture with SAIC Motor in China, where the company incurred a $104 million loss for the second quarter after significant production cuts. In June, SAIC-GM reduced production by 70% compared to the previous year, delivering only 26,000 vehicles.
In summary, GM is poised for growth with reinforced financial targets and a focus on evolving both its combustion and electric vehicle offerings. While the company navigates some challenges in the EV market and international operations, its strategic realignments and commitment to innovation signal a promising path forward for the automaker.