General Motors has increased its financial projections for 2024 after exceeding Wall Street’s expectations in its second-quarter results. The automaker has raised its anticipated adjusted earnings to between $13 billion and $15 billion, an increase from a previous range of $12.5 billion to $14.5 billion, and has also adjusted its targets for operating cash flow and earnings per share. The forecast for net income attributed to shareholders was slightly decreased, now expected to be between $10 billion and $11.4 billion, a reduction of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase from the previous year and surpassing the $45 billion estimate from Wall Street, based on FactSet figures. The earnings per share stood at $3.06, beating analysts’ projections of $2.71 and marking a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following this news, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to a year-to-date increase of over 37%. Additionally, GM announced a third-quarter cash dividend after the market closed on Monday, further boosting investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the success of the company’s gasoline-powered trucks and SUVs, mentioning the upcoming launch of eight new or redesigned models in North America, covering various segments. She also pointed out the ramp-up of production for the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined growth in electric vehicle (EV) offerings.
Despite the positive trajectory, Barra previously indicated that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company plans to adjust production based on demand, although EV sales did experience growth last quarter.
In a strategic shift, GM’s self-driving unit Cruise will discontinue the development of its Origin vehicle following a setback last October, opting instead to utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. The company incurred a $600 million charge related to the halt of Origin production in Detroit.
During an analyst call, Barra reassured stakeholders that the decision to use the Bolt would address regulatory concerns associated with the Origin’s unconventional design, including its absence of a steering wheel. This change is expected to reduce costs per unit and allow GM to better manage its resources.
Barra reiterated GM’s dedication to advancing mobility through autonomous technology, stating that each mile driven and simulation brings the company closer to achieving its goals, as Cruise continues to operate as an AI-first organization.
Additionally, GM is working on restructuring its joint venture in China with SAIC Motor amid ongoing financial losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, which is 50% fewer than the same period last year, according to Automotive News.