General Motors has updated its financial outlook for 2024 following impressive second-quarter results that exceeded analyst expectations. The company now anticipates adjusted earnings between $13 billion and $15 billion, an increase from earlier projections of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share, while slightly lowering its net income estimate for shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and exceeding Wall Street’s forecast of $45 billion. The earnings per share came in at $3.06, which is above the expected $2.71 and reflects a 60% increase compared to 2023. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Following the earnings announcement, GM’s stock surged nearly 5% in pre-market trading and has gained over 37% this year. The automaker announced a cash dividend for the third quarter, contributing to the stock’s positive momentum.
In a shareholder letter, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs and mentioned the launch of eight new or redesigned vehicle models across various sizes in North America. She emphasized the company’s commitment to disciplined growth in electric vehicle production, particularly regarding the Chevrolet Equinox, despite acknowledging that GM will not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to market fluctuations.
Barra also revealed that Cruise, GM’s autonomous driving division, will abandon its Origin vehicle, opting instead to utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a production halt of the Origin, which resulted in a $600 million charge for GM. Barra noted that the switch to the Bolt should alleviate regulatory concerns regarding the Origin’s unconventional design and will help reduce production costs.
GM is also working on restructuring its joint venture with SAIC Motor in China, as the partnership continues to incur losses. The company reported a $104 million loss for the second quarter, coinciding with SAIC-GM’s decision in June to cut production by 70%, resulting in deliveries of just 26,000 vehicles, which is 50% fewer than the previous year.