General Motors has announced an increase in several financial projections for 2024 following strong second-quarter results that surpassed Wall Street estimates.
The automaker has raised its anticipated adjusted earnings for the year to between $13 billion and $15 billion, up from a previous range of $12.5 billion to $14.5 billion. Additionally, GM has updated its targets for operating cash flow and earnings per share, while the expectations for net income attributable to shareholders were slightly reduced to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting an increase of more than 7% from the same period last year and exceeding the Wall Street expectation of $45 billion. Earnings per share reached $3.06, surpassing analysts’ projections of $2.71 per share and reflecting a 60% increase compared to 2023. The net income rose 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock price surged nearly 5% in pre-market trading, adding to a 37% rise so far this year. The company also declared a third-quarter cash dividend after Monday’s trading closed, further bolstering the stock’s value.
In a letter to shareholders, CEO Mary Barra emphasized the success of its gas-powered trucks and SUVs. She mentioned that GM is in the process of launching eight new or redesigned models in various segments across North America. The CEO also highlighted the scaling up of production for the electric Chevrolet Equinox, reaffirming the company’s commitment to disciplined growth in electric vehicle production despite an earlier announcement 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.
Barra also discussed the decision to discontinue the Origin vehicle from Cruise, GM’s self-driving division, which had previously halted operations after an incident. Instead, Cruise will focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the suspension of the Origin’s production in Detroit.
During a call with analysts, Barra explained that utilizing the Bolt would mitigate regulatory concerns regarding the unique design of the Origin, such as its lack of a steering wheel. This decision is expected to reduce costs and optimize resources.
Despite the challenges, Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, stating that the company continues to advance toward that goal.
In addition, GM is revising the structure of its joint venture in China with SAIC Motor as it faces ongoing losses, reporting a $104 million loss for the second quarter. Reports indicated that SAIC-GM reduced production by 70% in June, with only 26,000 vehicles delivered, reflecting a 50% decrease compared to the previous year.