General Motors is adjusting its financial projections for 2024 following a strong performance that exceeded Wall Street’s predictions for its second quarter.
The company has raised its expected 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. Additionally, GM has revised its targets for operating cash flow and earnings per share. However, the estimate for net income attributable to shareholders has been slightly lowered to between $10 billion and $11.4 billion.
In terms of revenue, GM reported $47.9 billion for the second quarter, marking a more than 7% rise from the previous year, surpassing the anticipated $45 billion according to FactSet estimates. Earnings per share stood at $3.06, exceeding the analysts’ expectation of $2.71 per share, and demonstrating a 60% increase compared to 2023. Net income also saw a 14% growth, rising to $2.9 billion from $2.5 billion.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has experienced an increase of over 37% this year. The company declared a third-quarter cash dividend after the market closed on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, revealing that the company is in the process of launching eight new or redesigned compact, mid-size, and full-size models in North America. She also mentioned the scaling up of production for the electric Chevrolet Equinox, while expressing commitment to “disciplined volume growth” despite earlier comments indicating that the company wouldn’t meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns.
Furthermore, Barra announced a significant change for Cruise, GM’s self-driving unit, which has decided to forgo its Origin vehicle in favor of utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This shift follows a $600 million charge related to halting Origin production in Detroit. Barra stated that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as its lack of a steering wheel, while also lowering costs per unit.
“Our vision to transform mobility using autonomous technology is unchanged,” Barra affirmed. “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 as it grapples with ongoing financial losses, having recorded a $104 million loss for the second quarter. In June, production at SAIC-GM was cut by 70%, resulting in the delivery of 26,000 vehicles, which is 50% less than the previous year, according to Automotive News.