General Motors is increasing several of its financial projections for 2024 following a strong performance in the second quarter that exceeded Wall Street forecasts.
The Detroit-based automaker has adjusted its expected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous range of $12.5 billion to $14.5 billion. Additionally, GM raised its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders by less than 1% to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, reflecting an over 7% increase from the same period last year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding analysts’ predictions of $2.71 per share and marking a 60% increase from 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion in the previous year.
GM’s stock saw an increase of nearly 5% in pre-market trading on Tuesday and has risen over 37% throughout the year. Following the close of trading on Monday, GM announced a cash dividend for the third quarter, contributing to the stock’s upward momentum.
In her letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, noting that GM is in the process of launching eight new or redesigned models across compact, mid-size, and full-size categories in North America. She also emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Earlier this month, Barra indicated that GM would not reach its target of producing 1 million electric vehicles in North America by the end of 2025, attributing the setback to a market slowdown. The company plans to remain flexible and “build to demand,” although it did see an increase in EV sales during the last quarter.
Furthermore, Barra announced that Cruise, GM’s autonomous driving unit, will discontinue its Origin vehicle following a halt in operations after an incident last October. The focus will now shift to testing next-generation Chevrolet Bolt vehicles in Texas and Arizona. GM has incurred a $600 million charge connected to the pause in Origin production.
During a conference call with analysts, Barra explained that transitioning to the Bolt would address regulatory concerns regarding the Origin’s unique design, such as its lack of a steering wheel. This decision is expected to reduce per-unit costs and enhance resource optimization.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra stated.
Additionally, GM is looking to restructure its joint venture in China with SAIC Motor amidst ongoing losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM cut production by 70%, delivering 26,000 vehicles, which is a 50% decline compared to the same time last year, according to Automotive News.