General Motors has increased several financial projections for 2024 after exceeding Wall Street’s expectations in its second-quarter results. The automaker has raised its adjusted earnings forecast for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, targets for operating cash flow and earnings per share have been adjusted upwards, although expectations for net income attributable to shareholders have been marginally lowered to between $10 billion and $11.4 billion.
During the second quarter, GM generated revenue of $47.9 billion, marking a more than 7% rise compared to the same period last year and surpassing the anticipated $45 billion as per FactSet estimates. Earnings per share reached $3.06, exceeding the forecast of $2.71 and reflecting a 60% increase from 2023. Net income also experienced a 14% increase, totaling $2.9 billion, compared to $2.5 billion in the previous year.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading, contributing to a more than 37% increase in stock value this year. On Monday, the company declared a third-quarter cash dividend, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs and noted the imminent release of eight new or redesigned models across various sizes in North America. She also mentioned the company’s expansion in the production of the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined growth in electric vehicle (EV) sales.
Earlier in the month, Barra acknowledged that GM would not meet its target of producing one million electric vehicles in North America by the end of 2025 due to a market slowdown. The company plans to adapt to demand despite a recent increase in EV sales.
Barra also shared updates regarding Cruise, GM’s autonomous vehicle division, which recently scaled back its operations after a prior incident. The company will discontinue its Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona, as GM incurred a $600 million charge linked to the halt in Origin production.
Barra addressed regulatory concerns regarding the Origin’s unique design, such as the absence of a steering wheel, stating that utilizing the Bolt would help mitigate these worries. This strategic shift is expected to lower costs and optimize resources within the organization.
Finally, GM is working on restructuring its joint venture with SAIC Motor in China due to ongoing losses, reporting a $104 million loss for the second quarter. Production was significantly reduced by SAIC-GM in June, with only 26,000 vehicles delivered, marking a 50% decline compared to the previous year.