General Motors is raising its financial projections for 2024 after exceeding Wall Street estimates for its second-quarter results. The automotive giant has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has revised its expectations for operating cash flow and earnings per share, while the net income attributable to shareholders was adjusted slightly downward, now expected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, marking an increase of over 7% from the same period last year, and surpassing the anticipated $45 billion according to FactSet estimates. Earnings per share reached $3.06, exceeding the analysts’ expectations of $2.71 per share and reflecting a 60% increase from 2023. The company’s net income rose by 14%, totaling $2.9 billion compared to $2.5 billion in the previous year.
Following these positive results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, and the shares have risen more than 37% throughout the year. A cash dividend for the third quarter, declared after trading on Monday, has also contributed to the stock’s upward momentum.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She shared that the company is in the process of launching eight new or redesigned vehicle models across various categories in North America. Barra also mentioned the ramp-up of production for the electric Chevrolet Equinox, emphasizing GM’s commitment to measured growth in electric vehicle volumes.
Earlier this month, Barra acknowledged that GM is unlikely to meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company plans to adapt by building according to demand, although it did experience growth in electric vehicle sales last quarter.
Barra also disclosed that Cruise, GM’s autonomous driving division, would discontinue production of the Origin vehicle, which was put on hold after a previous incident last October. Instead, Cruise will utilize the next-generation Chevrolet Bolt during testing in Texas and Arizona. GM recorded a $600 million charge due to the halt in Origin production.
During the analysts’ call, Barra noted that using the Bolt would address regulatory concerns linked to the unique design of the Origin, specifically its absence of a steering wheel. This decision is anticipated to reduce costs per unit and enhance resource optimization.
“Our vision to transform mobility using autonomous technology remains steadfast, and with each mile traveled and every simulation, we move closer to our goals, as Cruise operates as an AI-first company,” Barra stated.
In addition, GM is working to restructure its joint venture with SAIC Motor in China due to ongoing financial losses, having reported a $104 million loss in the second quarter. In June, the SAIC-GM partnership reduced production by 70%, delivering only 26,000 vehicles, a significant decline of 50% from the previous year.