General Motors has increased its financial projections for 2024 after significantly exceeding analysts’ expectations in its second-quarter report. The Detroit-based automaker has revised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an improvement from a previously expected range of $12.5 billion to $14.5 billion. Additionally, GM raised its targets for operating cash flow and earnings per share. While net income attributable to shareholders saw a slight downgrade of less than 1%, it is still projected to fall between $10 billion and $11.4 billion.
In the second quarter, GM’s revenue reached $47.9 billion, representing a more than 7% increase compared to last year, and surpassing Wall Street’s estimate of $45 billion. The company’s earnings per share stood at $3.06, exceeding the predicted $2.71, and marking a 60% rise from 2023. Net income rose by 14% to $2.9 billion, up from the previous $2.5 billion.
Following these strong results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, reflecting a 37% increase over the course of the year. The company also declared a cash dividend for the third quarter, further boosting investor confidence.
CEO Mary Barra highlighted the successful performance of the company’s gas-powered trucks and SUVs in a letter to shareholders. She mentioned that GM is preparing to launch eight new or redesigned vehicle models in North America while also ramping up production of the electric Chevrolet Equinox. Barra expressed enthusiasm about their electric vehicles but emphasized a commitment to disciplined growth.
Earlier this month, Barra noted that GM will not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowing market. However, she stated that the company would continue to be flexible and responsive to demand, although electric vehicle sales did see growth in the recent quarter.
Additionally, Barra announced that Cruise, GM’s autonomous driving division, would discontinue its Origin vehicle and instead concentrate on testing the next-generation Chevrolet Bolt in Texas and Arizona. This decision aims to address regulatory concerns regarding the unique design of the Origin and will help reduce production costs.
Looking forward, GM is also working to restructure its venture in China with SAIC Motor, facing challenges as the company reported a $104 million loss in the second quarter. The partnership has seen a significant drop in vehicle production, with a 70% reduction that led to a delivery of only 26,000 vehicles, half of what was delivered a year earlier.
Overall, while GM navigates some obstacles, the company is showing strong financial performance and is committed to its vision of transforming mobility through innovative technologies, which could positively reshape its future in the automotive industry.
In summary, GM’s financial success in the second quarter, coupled with a strategic focus on both gas-powered and electric vehicles, positions the company well for growth despite some challenges in the market.