General Motors has elevated several of its financial projections for 2024 following a strong performance that exceeded Wall Street expectations in the second quarter. The automaker has adjusted its anticipated 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, targets for operating cash flow and earnings per share have also been raised, while net income attributable to shareholders was slightly lowered to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking an over 7% increase compared to the same period last year and surpassing the $45 billion analysts projected, according to FactSet estimates. Earnings per share stood at $3.06, significantly above the $2.71 expected, and showing a 60% growth from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
As a result, GM’s stock surged nearly 5% in pre-market trading on Tuesday, continuing a year-long upward trend of over 37%. Following the market close on Monday, GM announced a cash dividend for the third quarter, contributing to the stock’s positive momentum.
In a communication to shareholders, CEO Mary Barra emphasized the strong demand for the company’s gas-powered trucks and SUVs and announced plans to launch eight new or redesigned models in North America. Barra highlighted the scaling production of the electric Chevrolet Equinox and reiterated the company’s commitment to responsible growth in electric vehicles (EVs), despite acknowledging a setback in reaching their goal of producing 1 million EVs in North America by 2025 due to a slowdown in the market.
Additionally, Barra revealed that Cruise, GM’s autonomous driving division, will abandon its Origin vehicle following a rollback in operations last October. The focus will now shift to utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the discontinuation of the Origin’s production in Detroit.
During a conference call with analysts, Barra mentioned that employing the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This adjustment is expected to reduce costs per unit and enhance resource management.
Barra reaffirmed GM’s vision to innovate mobility through autonomous technology, stating that every mile and simulation is bringing them closer to their goals as Cruise positions itself as an AI-driven company.
Lastly, GM is working to restructure its joint venture in China with SAIC Motor amid ongoing financial losses, which amounted to $104 million in the second quarter. In June, SAIC-GM significantly reduced production by 70%, resulting in the delivery of 26,000 vehicles, a decrease of 50% compared to the previous year.