General Motors has raised several financial forecasts for 2024 following its strong performance in the second quarter, which exceeded Wall Street expectations. The Detroit automaker adjusted its anticipated earnings for the year to between $13 billion and $15 billion, an increase from a previous range of $12.5 billion to $14.5 billion. Additionally, GM raised its projections for operating cash flow and earnings per share, while slightly lowering the net income expectation for shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, marking a more than 7% rise from the previous year and surpassing Wall Street’s anticipated $45 billion. Earnings per share were reported at $3.06, exceeding the expected $2.71 and reflecting a 60% increase compared to 2023. Net income for the quarter rose by 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock experienced nearly a 5% jump in pre-market trading on Tuesday and has gained over 37% this year. The company also declared a cash dividend for the third quarter after Monday’s trading closed, contributing to the stock’s upward momentum.
In a message to shareholders, CEO Mary Barra highlighted the company’s success with gas-powered trucks and SUVs, noting plans to introduce eight new or redesigned models in North America. She indicated that GM is ramping up production of the electric Chevrolet Equinox and expressed enthusiasm about the prospects for electric vehicles, while emphasizing a commitment to controlled growth.
However, Barra admitted that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing the setback to a market slowdown. The company plans to remain adaptable and “build to demand,” despite witnessing growth in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, has decided to discontinue its Origin vehicle amid operational setbacks and will instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the halt in production of the Origin in Detroit. Barra reassured investors that this shift would address regulatory concerns about the Origin’s design and help reduce costs.
“Our vision to transform mobility using autonomous technology remains intact,” Barra stated, emphasizing Cruise’s commitment to innovation and progress in the field of AI-driven transportation.
GM is also working on restructuring its joint venture with SAIC Motor in China as it faces ongoing losses, with the company reporting a $104 million loss for the second quarter. Production at SAIC-GM was cut by 70% in June, leading to a delivery of only 26,000 vehicles, which is a decrease of 50% compared to the previous year.