General Motors has boosted several financial projections for 2024, following a strong performance that exceeded Wall Street’s expectations for its second quarter.
The Detroit automaker has revised its anticipated adjusted earnings for the year upwards to a range of $13 billion to $15 billion, up from an earlier forecast of $12.5 billion to $14.5 billion. Additionally, it has increased its projections 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.
For the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase from the previous year and surpassing Wall Street’s forecast of $45 billion, according to FactSet estimates. The earnings per share stood at $3.06, exceeding analysts’ expectations of $2.71, and representing a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock surged nearly 5% in pre-market trading and has experienced an over 37% increase this year. The company also declared a third-quarter cash dividend, contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs. She mentioned GM’s plans to launch eight new or redesigned models in North America, covering various sizes. Barra also discussed the scaling of production for the electric Chevrolet Equinox, emphasizing a commitment to disciplined volume growth despite early successes with electric vehicles (EVs).
Earlier this month, Barra acknowledged that GM would fall short of its target of producing 1 million electric vehicles in North America by the end of 2025, attributing it to a slowdown in the market. The company plans to adapt by “building to demand,” even as its EV sales saw growth in the last quarter.
Additionally, Barra announced modifications for Cruise, GM’s self-driving unit, which had to scale back its operations after an incident last October. The company will jettison its Origin vehicle and shift focus to utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the halt of the Origin’s production in Detroit.
Barra mentioned that employing the Bolt would address regulators’ concerns about the Origin’s unconventional design, such as its lack of a steering wheel. This change is expected to reduce unit costs and help optimize resources.
“Our vision to transform mobility with autonomous technology remains steadfast,” Barra stated. “Every mile traveled and every simulation brings us closer because Cruise is an AI-first company.”
Moreover, GM is working on restructuring its joint venture in China with SAIC Motor as it continues to face losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM cut production by 70%, delivering only 26,000 vehicles, which is a 50% decrease from the previous year.