General Motors is increasing several financial projections for 2024 after exceeding Wall Street’s expectations in its second quarter results.
The Detroit-based automaker has raised its forecast for adjusted earnings this year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion, and has also adjusted its targets for operating cash flow and earnings per share. The projection for net income attributable to shareholders has been decreased slightly, to between $10 billion and $11.4 billion, a reduction of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, representing more than a 7% increase from the same period last year and surpassing the expected $45 billion according to FactSet estimates. Earnings per share stood at $3.06, exceeding the anticipated $2.71 and marking a 60% increase year-over-year. The company’s net income rose 14% to $2.9 billion, compared to $2.5 billion from the previous year.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, with the stock having increased over 37% since the start of the year. After the market closed on Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gasoline-powered trucks and SUVs. She noted that the company is in the process of introducing eight new or redesigned vehicle models across various sizes in North America. Barra mentioned the ramp-up of production for the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined volume growth despite earlier projections that anticipated producing 1 million electric vehicles in North America by the end of 2025, which may not be met due to a market slowdown.
Barra also revealed that Cruise, GM’s self-driving division that scaled back operations after a previous incident, will no longer pursue the Origin vehicle concept. Instead, the focus will shift to using the next-generation Chevrolet Bolt for testing in Texas and Arizona, following a $600 million charge associated with halting Origin production in Detroit. This strategy is expected to address regulatory concerns regarding the unique design of the Origin and is projected to reduce costs per unit while optimizing resources.
“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 working to restructure its joint venture with SAIC Motor in China, as the company reported a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is a 50% drop compared to the previous year, according to reports.