General Motors has raised several financial projections for 2024 after exceeding Wall Street’s expectations in the second quarter. The Detroit-based automaker has adjusted 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 raised its targets for operating cash flow and earnings per share, although it slightly lowered its net income expectations for shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
For the second quarter, GM reported revenue of $47.9 billion, which represents more than a 7% increase compared to the same period last year and exceeds Wall Street’s expectations of $45 billion, according to estimates from FactSet. The company’s earnings per share reached $3.06, surpassing the analyst forecast of $2.71 and marking a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result of these strong financial results, GM’s stock price jumped nearly 5% in pre-market trading on Tuesday, reflecting an overall increase of more than 37% this year. Additionally, GM announced a cash dividend for the third quarter, further boosting the stock’s performance.
In a letter to shareholders, GM CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs. She mentioned that GM is in the process of launching eight new or redesigned models in North America, which include compact, mid-size, and full-size vehicles. Barra also discussed the scaling up of production for the electric Chevrolet Equinox and expressed excitement about the company’s electric vehicle growth, while emphasizing a commitment to disciplined volume growth.
Earlier this month, Barra acknowledged that GM is unlikely to meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowing market. Nevertheless, the company continues to adapt and “build to demand,” although EV sales did see growth in the past quarter.
Additionally, Barra announced that Cruise, GM’s self-driving unit, will discontinue its Origin vehicle amid previous operational challenges. Instead, the focus will shift to the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the cessation of Origin production in Detroit.
During an analyst call, Barra explained that using the Bolt for testing would address regulatory concerns regarding the Origin’s unique design, which lacks a steering wheel. She noted that this transition would also reduce costs per unit and aid in resource optimization.
Finally, GM is restructuring its joint venture in China with SAIC Motor as it faces ongoing losses, reporting a $104 million loss for the second quarter. In June, production cuts led SAIC-GM to produce only 26,000 vehicles, a 50% decline from the same time last year.