General Motors has announced an increase in its financial projections for 2024 following strong performance in its second quarter, which exceeded Wall Street forecasts.
The Detroit-based automaker has adjusted its expected adjusted earnings for the year to a range of $13 billion to $15 billion, raising it from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has increased its targets for operating cash flow and earnings per share, although expectations for net income attributable to shareholders have been slightly reduced to between $10 billion and $11.4 billion, a decrease of less than 1%.
For the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% compared to the previous year, and surpassing the Wall Street estimate of $45 billion, according to FactSet. Earnings per share were recorded at $3.06, exceeding analysts’ expectations of $2.71 per share, and reflecting a 60% increase from 2023. The company’s net income rose by 14% to reach $2.9 billion, up from $2.5 billion the previous year.
Following the announcement, GM’s stock rose nearly 5% in pre-market trading, continuing a trend that has seen shares climb more than 37% this year. Additionally, GM declared a third-quarter cash dividend, which contributed to the stock’s momentum.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, and revealed plans to launch eight new or redesigned models across various categories in North America. She also mentioned the scaling up of production for the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in volume, despite earlier comments about not meeting the target of one million electric vehicles produced in North America by the end of 2025 due to market conditions.
Barra also provided an update on Cruise, GM’s self-driving unit, which had previously scaled back its operations after an incident last October. The company has decided to abandon its Origin vehicle project and will instead focus on utilizing the next-generation Chevrolet Bolt for ongoing tests in Texas and Arizona. GM incurred a $600 million charge related to winding down the Origin production in Detroit.
During a call with analysts, Barra stated that using the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. She noted that this pivot would also reduce costs per unit and optimize GM’s resources.
Barra reiterated the company’s vision for transforming mobility through autonomous technology, emphasizing that every mile and simulation brings Cruise closer to its goals. Additionally, GM is working to restructure its joint venture in China with SAIC Motor, which has been experiencing losses, including a $104 million loss for the second quarter. Earlier this year, production at SAIC-GM was cut by 70%, resulting in deliveries of 26,000 vehicles, a 50% decrease compared to the previous year.