General Motors has updated its financial projections for 2024 after exceeding expectations for its second quarter results. The automaker has adjusted its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, improving upon the previous estimate of $12.5 billion to $14.5 billion. GM has also raised its targets for operating cash flow and earnings per share, while slightly lowering its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% compared to the same period last year and surpassing Wall Street’s expectation of $45 billion. Earnings per share were reported at $3.06, well above the anticipated $2.71, and show a substantial increase of 60% from the previous year. Net income rose by 14%, reaching $2.9 billion compared to $2.5 billion in the prior year.
Following this announcement, GM’s stock rose nearly 5% in pre-market trading and has gained more than 37% this year. Additionally, GM declared a third-quarter cash dividend after the market closed on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra celebrated the success of GM’s gas-powered trucks and SUVs, while stating that the company is launching eight new or redesigned models across various sizes in North America. She also highlighted the scaling of production for the electric Chevrolet Equinox but acknowledged that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. GM plans to adapt its production to align with demand, even though its EV sales saw growth last quarter.
Barra also announced that Cruise, GM’s self-driving division, will abandon its Origin vehicle, which stalled operations following an incident last year. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the halt in production of the Origin in Detroit.
During an analyst call, Barra explained that using the Bolt will address regulatory concerns over the unique design of the Origin, including its lack of a steering wheel. This change is expected to reduce costs per unit and enhance resource optimization.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, emphasizing that every simulation and mile driven brings the company closer to achieving its goals. Furthermore, GM is working to restructure its joint venture in China with SAIC Motor, which has incurred losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, which is a 50% decline compared to the previous year.