General Motors has updated its financial projections for 2024 after exceeding Wall Street’s expectations for its second quarter results. The Detroit-based automaker now anticipates adjusted earnings for the year to range between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM raised its forecast 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, a growth of over 7% compared to the same period last year, surpassing the $45 billion Wall Street estimate, based on FactSet data. The company earned $3.06 per share, exceeding analyst expectations of $2.71, and representing a 60% increase from 2023. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
GM’s stock rose nearly 5% in pre-market trading on Tuesday, marking a more than 37% increase in value this year. Following the close of trading on Monday, the company declared a cash dividend for the third quarter, contributing to the stock’s surge.
In a letter addressed to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, as well as the launch of eight new or redesigned models in North America. She also mentioned the ramp-up in production of the electric Chevrolet Equinox, noting the company’s commitment to disciplined volume growth despite earlier comments indicating a slower-than-expected rollout of electric vehicles.
This month, Barra acknowledged that GM would fall short of its goal to manufacture 1 million electric vehicles in North America by the end of 2025 due to a market slowdown, but emphasized flexibility in production based on demand, even as EV sales increased in the last quarter.
Furthermore, the CEO revealed that Cruise, GM’s self-driving vehicle unit, would discontinue its Origin vehicle following operational setbacks last October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the suspension of Origin production in Detroit.
During a call with analysts, Barra indicated that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, which lacked a steering wheel. This strategic shift is expected to reduce costs and improve resource management.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, stating that each operational mile and simulation advances the company’s goals as Cruise adopts an AI-first approach. Additionally, GM is working to restructure its joint venture with SAIC Motor in China, where it reported a loss of $104 million in the second quarter. In June, production at SAIC-GM was reduced by 70%, with vehicle deliveries dropping to 26,000, a decline of 50% compared to the previous year.