General Motors has increased several financial outlooks for 2024 following a strong performance that exceeded Wall Street’s predictions for its second quarter.
The automaker has adjusted its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, which is an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its projections for operating cash flow and earnings per share. However, it slightly reduced its expectations for net income attributable to shareholders, lowering it by less than 1%, now forecasting between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking more than a 7% increase compared to the same period last year and surpassing Wall Street’s expectation of $45 billion, as estimated by FactSet. The earnings per share were reported at $3.06, exceeding analysts’ predictions of $2.71 per share and representing a 60% rise from 2023. The company’s net income grew 14% to $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM’s stock surged nearly 5%. The stock has risen over 37% this year. Following the market close on Monday, GM announced a cash dividend for the third quarter, positively impacting its stock value.
In a communication to shareholders, CEO Mary Barra emphasized the strong performance of GM’s gas-powered trucks and SUVs. She mentioned that the company is in the midst of launching eight new or redesigned models in North America, covering compact, mid-size, and full-size categories. Barra also highlighted GM’s plans to increase production of the electric Chevrolet Equinox, assuring shareholders of the company’s commitment to disciplined growth in electric vehicle production.
Earlier this month, Barra indicated that GM would miss its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company stated it would remain flexible and adapt production to meet demand, despite a rise in EV sales during the last quarter.
Barra also revealed that Cruise, GM’s self-driving division, would cease production of its Origin vehicle, which faced operational challenges after a previous incident last October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the suspended production of the Origin in Detroit.
During a discussion with analysts, Barra noted that using the Bolt should address any regulatory concerns regarding the Origin’s unconventional design, such as the absence of a steering wheel. This change is expected to reduce costs per unit and help GM allocate resources more efficiently.
Barra reaffirmed that GM’s goal of transforming mobility through autonomous technology remains intact, stating that each mile traveled and each simulation draws the company closer to its mission, as Cruise is fundamentally driven by artificial intelligence.
In addition, GM is seeking to reorganize its joint venture in China with SAIC Motor due to ongoing financial losses, including a reported loss of $104 million in the second quarter. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, which represents a 50% decline compared to the previous year.