General Motors has updated its financial outlook for 2024 after significantly exceeding Wall Street’s expectations for the second quarter. The Detroit-based automaker has adjusted its projected adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. GM has also raised its targets for operating cash flow and earnings per share, although it slightly lowered its expectation for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, reflecting a rise of over 7% compared to the same period last year and surpassing the $45 billion anticipated by Wall Street analysts. The company achieved earnings per share of $3.06, which exceeded the expected $2.71 and represented a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result of this positive performance, GM’s stock increased nearly 5% in pre-market trading on Tuesday, bringing its year-to-date gains to over 37%. Following the close of trading on Monday, GM announced a third-quarter cash dividend, which further supported its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs, announcing plans to introduce eight new or redesigned vehicle models across different sizes in North America. Barra also mentioned the scaling production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined volume growth despite the excitement surrounding their electric vehicles (EVs).
Earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, citing a market slowdown. The automaker indicated its willingness to be flexible and “build to demand” while noting growth in EV sales in the previous quarter.
Barra also stated that Cruise, GM’s autonomous driving division, will discontinue its Origin vehicle and instead focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. The decision to halt the Origin’s production resulted in a $600 million charge for GM. While addressing analysts, Barra mentioned that using the Bolt addresses regulatory concerns tied to the Origin’s unconventional design, such as the absence of a steering wheel. This shift is expected to reduce unit costs and help GM optimize its resources.
“Our vision to transform mobility using autonomous technology remains strong, and with each mile traveled and simulation conducted, we are making progress because Cruise operates as an AI-first company,” Barra remarked.
Additionally, GM is working on restructuring its joint venture with SAIC Motor in China amidst ongoing losses, having reported a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, which is a decrease of 50% from the previous year, as reported by Automotive News.