General Motors has updated its financial projections for 2024 following a strong performance in the second quarter, exceeding Wall Street’s forecasts.
The company has raised its adjusted earnings expectations for the year to between $13 billion and $15 billion, up from the previous range of $12.5 billion to $14.5 billion. It also increased its targets for operating cash flow and earnings per share, although it slightly adjusted its net income forecast for shareholders downward, to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, showing a more than 7% increase from the previous year and surpassing Wall Street’s expectation of $45 billion, as per FactSet estimates. Earnings per share reached $3.06, exceeding the $2.71 expected by analysts and reflecting a 60% jump compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
In response to the robust results, GM’s stock surged nearly 5% in pre-market trading Tuesday, contributing to a year-to-date increase of over 37%. The announcement of a third-quarter cash dividend also positively impacted the stock value.
In her letter to shareholders, CEO Mary Barra highlighted the strong sales of the company’s gas-powered trucks and SUVs and mentioned plans to introduce eight new or redesigned compact, mid-size, and full-size models in North America. She emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox, stating that while they are excited about their electric vehicle (EV) initiatives, they are focused on disciplined volume growth.
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 market slowdowns, but assured stakeholders that the company will be flexible and build based on demand, noting a rise in EV sales during the previous quarter.
Additionally, the CEO revealed that Cruise, GM’s autonomous vehicle unit, will abandon its Origin vehicle model and focus instead on adapting the next-generation Chevrolet Bolt for testing in Texas and Arizona. This shift comes after the company incurred a $600 million charge related to halting production of the Origin model.
Barra expressed confidence in GM’s vision for transforming mobility through autonomous technology, underscoring the importance of every mile and simulation in progressing toward their goals.
Lastly, GM is seeking to restructure its joint venture in China with SAIC Motor as it addresses losses, with the company reporting a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, resulting in 26,000 vehicle deliveries, which is a 50% decrease compared to the previous year.