General Motors has revised its financial projections for 2024 following a strong performance that exceeded Wall Street’s estimates for the second quarter.
The Detroit-based company has increased its forecast for adjusted earnings this year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. In addition, GM has adjusted its targets for operating cash flow and earnings per share, while slightly lowering the expected net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, a more than 7% increase from the prior year, surpassing the Wall Street expectation of $45 billion. Earnings per share were reported at $3.06, significantly higher than the anticipated $2.71 and representing a 60% rise from 2023. Net income increased by 14% to $2.9 billion, compared to $2.5 billion in the previous year.
As a result of these positive results, GM’s stock surged almost 5% in pre-market trading on Tuesday and has risen over 37% for the year. On Monday, GM announced a third-quarter cash dividend, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, mentioning plans to launch eight new or redesigned vehicle models across various categories in North America. She also emphasized that GM is ramping up production of the electric Chevrolet Equinox, affirming the company’s commitment to disciplined volume growth despite market slowdowns.
Earlier this month, Barra indicated that GM would not be able to meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. Nevertheless, the company reported an increase in EV sales last quarter and plans to remain flexible by adjusting production to meet demand.
Barra also announced changes to GM’s self-driving unit, Cruise, which will discontinue its Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. The decision came after a $600 million charge related to the halted production of the Origin in Detroit. Barra mentioned that the shift to the Bolt will help address regulatory concerns regarding the Origin’s unconventional design and will also reduce unit costs.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” she stated.
Moreover, GM is working to restructure its joint venture in China with SAIC Motor as it faces ongoing losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is a 50% decline from the previous year.