General Motors is raising its financial projections for 2024 following a strong performance in the second quarter that exceeded Wall Street’s expectations. The Detroit-based automaker has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous forecast of $12.5 billion to $14.5 billion, while also raising targets for operating cash flow and earnings per share. There was only a slight reduction of less than 1% in the expected net income attributable to shareholders, now projected between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% rise from the same period last year and surpassing the expected $45 billion according to FactSet estimates. The company’s earnings per share stood at $3.06, exceeding the forecast of $2.71, and reflecting a 60% increase from 2023. Net income rose 14% to $2.9 billion from $2.5 billion.
Following these results, GM’s stock surged nearly 5% in pre-market trading, contributing to an impressive 37% increase in its stock value this year. As a part of this financial momentum, GM declared a cash dividend for the third quarter, offering an additional boost to its stock.
In a shareholder letter, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, alongside the imminent launch of eight new or redesigned vehicle models in North America. She emphasized the company’s commitment to scaling production of the electric Chevrolet Equinox while maintaining disciplined growth in the electric vehicle (EV) sector.
Barra did mention that GM would not meet its internal goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown, but assured stakeholders that the company is adapting by building to demand. Notably, GM’s EV sales did see growth last quarter.
The CEO also conveyed changes within GM’s self-driving unit, Cruise, which decided to forgo its Origin vehicle, previously intended for autonomous driving, in favor of utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This strategic pivot follows a $600 million charge related to the halted production of the Origin. By shifting to the Bolt, GM aims to address regulatory concerns around the Origin’s unconventional design while enhancing cost efficiency.
GM is also in the process of restructuring its joint venture with SAIC Motor in China, where it experienced a $104 million loss in the second quarter. Production cuts by SAIC-GM have seen a significant reduction in vehicle deliveries, prompting the need for strategic reevaluation.
In summary, GM’s robust second-quarter performance, commitment to electric vehicle growth, and strategic realignments in self-driving technology illustrate a proactive approach despite challenges. The optimism surrounding GM’s financial targets and innovations could pave the way for a prosperous future in the ever-evolving automotive landscape. The company’s adaptability reflects resilience, potentially fostering further success as it navigates changes in consumer demand and market conditions.