General Motors is increasing several financial projections for 2024 following strong performance that exceeded Wall Street predictions in its second quarter results.
The Detroit-based company has revised its forecast for adjusted earnings to a range of $13 billion to $15 billion, up from the previous $12.5 billion to $14.5 billion range. Additionally, GM has raised its expectations for operating cash flow and earnings per share. However, the outlook for net income attributable to shareholders has been slightly reduced by less than 1%, now estimated to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing an increase of over 7% from the previous year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding the anticipated $2.71 and marking a 60% increase compared to 2023. Net income also rose 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM shares rose nearly 5% in pre-market trading on Tuesday, with the stock climbing over 37% year-to-date. Additionally, GM announced a third-quarter cash dividend after trading closed on Monday, further boosting investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the successful performance of its gas-powered trucks and SUVs, while mentioning the company’s plans to introduce eight new or redesigned models across compact, mid-size, and full-size categories in North America. She also emphasized the ramp-up of production for the electric Chevrolet Equinox and reiterated GM’s commitment to disciplined growth in electric vehicle production despite earlier projections of producing 1 million electric vehicles in North America by the end of 2025 being adjusted due to market slowdowns. However, GM’s electric vehicle sales did see growth last quarter.
Furthermore, Barra announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle project, opting instead to utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a $600 million charge related to the halted production of the Origin in Detroit, which had raised regulatory concerns due to its unique design lacking a steering wheel. The switch to the Bolt is expected to reduce costs and optimize resources, according to Barra.
“Our vision to transform mobility using autonomous technology remains unchanged, and with every mile traveled and every simulation conducted, we are getting closer to achieving this goal since Cruise is focused on AI development,” Barra stated.
GM is also working to restructure its joint venture with SAIC Motor in China as it faces ongoing losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM cut production by 70%, delivering 26,000 vehicles, which is a 50% decrease compared to the previous year, as reported by Automotive News.