General Motors has increased its financial projections for 2024 following a strong performance in the second quarter that exceeded Wall Street expectations. The company now anticipates adjusted earnings to range between $13 billion and $15 billion, a revision from previous estimates of $12.5 billion to $14.5 billion. Additionally, it has raised 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 generated revenue of $47.9 billion, reflecting a more than 7% increase from the previous year and surpassing the $45 billion forecast by analysts, according to FactSet. The company’s earnings per share stood at $3.06, exceeding the anticipated $2.71 and marking a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM’s stock surged nearly 5%. The stock has seen an increase of over 37% this year. Following the closing of trading on Monday, GM announced a cash dividend for the third quarter, boosting investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, noting plans to launch eight new or redesigned models in North America. She also discussed the production scaling of the electric Chevrolet Equinox and reaffirmed GM’s commitment to disciplined growth in the electric vehicle sector, despite admitting that the company would not meet its 1 million electric vehicle production goal in North America by the end of 2025 due to a market slowdown.
Barra also revealed that Cruise, GM’s self-driving division, would discontinue its Origin vehicle following setbacks from an incident last October. Instead, the unit will shift focus to utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona, resulting in a $600 million charge for halting Origin production.
During an analyst call, Barra explained that using the Bolt would address regulatory concerns about the Origin’s unique design, including its absence of a steering wheel. This strategic shift is expected to lower costs per vehicle and enhance resource optimization.
GM is also in the process of restructuring its joint venture in China with SAIC Motor, addressing ongoing losses, which resulted in a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, with vehicle deliveries falling to 26,000, a 50% decrease compared to the previous year, as reported by Automotive News.