General Motors has updated its financial projections for 2024, significantly exceeding Wall Street’s forecasts for its second quarter results.
The automaker has revised its expected adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM raised its targets for operating cash flow and earnings per share. However, expectations for net income attributable to shareholders have slightly decreased by less than 1%, now estimated between $10 billion and $11.4 billion.
For the second quarter, GM reported a revenue of $47.9 billion, marking a rise of more than 7% compared to last year and surpassing Wall Street’s anticipated $45 billion. The earnings per share stood at $3.06, which exceeds analysts’ expectations of $2.71 and represents a 60% increase from 2023. The company’s net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM’s stock saw an increase of nearly 5%. The stock has experienced a growth of over 37% so far this year. Following the close of trading on Monday, GM announced a cash dividend for the third quarter, which positively impacted its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the successful performance of GM’s gas-powered trucks and SUVs. She also mentioned the company’s plans to launch eight new or redesigned vehicle models, including compact, mid-size, and full-size options in North America. Barra emphasized GM’s commitment to disciplined growth in the production of the electric Chevrolet Equinox, stating that the company is enthusiastic about its electric vehicles but remains dedicated to maintaining cautious volume growth.
Earlier this month, Barra indicated that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slow market. The company has expressed its intention to remain adaptable and “build to demand,” though it did report an increase in EV sales for the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division that had to reduce operations following an incident last October, will discontinue its Origin vehicle. Instead, Cruise will prioritize testing the next-generation Chevrolet Bolt in Texas and Arizona. GM has recorded a $600 million charge due to the halt in production of the Origin in Detroit.
During a conference call with analysts, Barra explained that utilizing the Bolt will address any regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This shift is expected to reduce per-unit costs and enhance resource allocation for GM.
“Our vision to transform mobility with autonomous technology remains steadfast, and every mile traveled, along with every simulation, is a step forward as Cruise operates as an AI-first company,” Barra stated.
Moreover, GM is in the process of restructuring its joint venture with SAIC Motor in China, continuing to face financial losses, including a $104 million loss in the second quarter. In June, SAIC-GM significantly cut production by 70%, delivering only 26,000 vehicles—50% less than in the previous year.