General Motors has increased several financial projections for 2024 after exceeding analysts’ expectations for its second-quarter performance.
The Detroit-based automaker now anticipates adjusted earnings for the year to be between $13 billion and $15 billion, a rise from its previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has boosted its targets for operating cash flow and earnings per share, although it has slightly lowered expectations for net income attributable to shareholders to a range of $10 billion to $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share were $3.06, exceeding the expected $2.71 and reflecting a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following this announcement, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to a year-to-date increase of over 37%. Additionally, GM declared a third-quarter cash dividend, providing further support to its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs and mentioned plans for the launch of eight new or redesigned compact, mid-size, and full-size models in North America. She also discussed the scaling production of the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined volume growth despite earlier declarations that the company would not meet its goal of producing 1 million electric vehicles in North America by 2025 due to a market slowdown.
Barra announced that GM’s self-driving unit, Cruise, will shift focus away from its Origin vehicle design and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to halting production of the Origin model.
During a recent call with analysts, Barra noted that transitioning to the Bolt would address regulatory concerns over the Origin’s unconventional design. She asserted that this change would also help reduce costs per unit and optimize resource allocation.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, stating, “every mile traveled and every simulation brings us closer because Cruise is an AI-first company.”
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, where it has been facing losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is half of what was sold a year earlier, as reported by Automotive News.