General Motors has updated its financial outlook for 2024 following a strong performance in the second quarter that exceeded Wall Street’s expectations.
The automotive giant has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, though it slightly lowered expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, revenue reached $47.9 billion, marking a more than 7% increase from the prior year and surpassing Wall Street’s forecast of $45 billion, according to estimates from FactSet. Earnings per share stood at $3.06, exceeding the anticipated $2.71 and representing a 60% rise from 2023. Net income rose 14%, totaling $2.9 billion, up from $2.5 billion.
As a result of these positive figures, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to a year-to-date increase of over 37%. Following market closure on Monday, GM also announced a third-quarter cash dividend, further boosting stock performance.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s traditional gas-powered trucks and SUVs. She mentioned the company’s plan to launch eight new or redesigned vehicle models in North America, including the ramp-up of production for the electric Chevrolet Equinox. Barra stated that while the company is excited about its electric vehicles (EVs), it remains focused on disciplined growth.
Earlier this month, Barra indicated that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. Despite this, the company’s EV sales increased in the last quarter.
Barra also revealed that Cruise, GM’s self-driving subsidiary which had to scale back operations after a previous incident, will abandon its Origin vehicle model. Instead, it will concentrate on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This change comes after GM incurred a $600 million charge linked to the halt of Origin production in Detroit.
In a call with analysts, Barra explained that utilizing the Bolt would address regulatory concerns surrounding the Origin’s unconventional design, which lacked a steering wheel. This adjustment is expected to reduce costs per unit and enhance resource optimization.
“Our vision to transform mobility using autonomous technology remains steadfast. Every mile traveled and every simulation brings us closer, as Cruise is designed with AI at its core,” Barra said.
Furthermore, GM is working to restructure its joint venture with SAIC Motor in China, which has reported continuous losses; the company suffered a $104 million loss in the second quarter. In June, production at SAIC-GM was reduced by 70%, resulting in the delivery of just 26,000 vehicles—50% fewer than the previous year, as reported by Automotive News.