General Motors has increased its financial projections for 2024 following a strong performance that exceeded Wall Street’s expectations in the second quarter. The automaker has raised its anticipated adjusted earnings for the year to between $13 billion and $15 billion, an adjustment from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding the projected $2.71 per share and representing a 60% increase from 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
Following this positive news, GM’s stock rose nearly 5% in pre-market trading on Tuesday, with the stock price having increased over 37% this year. Additionally, GM announced a cash dividend for the third quarter, further enhancing investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the strong demand for GM’s gas-powered trucks and SUVs. She mentioned the launch of eight new or redesigned vehicle models in North America and emphasized the ramp-up of production for the electric Chevrolet Equinox. Barra expressed optimism regarding their electric vehicles (EVs) while maintaining a focus on disciplined growth.
However, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company has opted for a flexible approach in production, aiming to align with demand, despite a rise in EV sales last quarter.
Additionally, Barra announced that GM’s self-driving division, Cruise, which had previously scaled back operations due to an incident last October, will discontinue its Origin vehicle. Instead, Cruise will refocus on testing with the next-generation Chevrolet Bolt in Texas and Arizona. This move follows a $600 million charge GM took concerning the halted production of the Origin.
During an analysts’ call, Barra noted that using the Bolt would address regulatory concerns related to the Origin’s unconventional design, which lacked a steering wheel. She added that this shift would reduce per unit costs and streamline resource allocation.
Barra emphasized GM’s commitment to transforming mobility through autonomous technology, stating that each mile and simulation brings the company closer to its goals. Furthermore, GM is 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, production at SAIC-GM was cut by 70%, resulting in the delivery of 26,000 vehicles, which is a 50% decrease compared to the previous year.