General Motors has announced an increase in its financial forecasts for 2024 after exceeding Wall Street’s expectations for its second quarter performance.
The Detroit-based automaker now anticipates adjusted earnings for the year to range from $13 billion to $15 billion, up 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, representing a year-over-year increase of more than 7% and surpassing the $45 billion forecast from analysts. The earnings per share were $3.06, exceeding the expected $2.71 and marking a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, compared to $2.5 billion in the same period last year.
Following this announcement, GM’s stock saw an increase of nearly 5% in pre-market trading on Tuesday, and has risen over 37% since the start of the year. After the market closed on Monday, GM declared a cash dividend for the third quarter which contributed to the stock’s positive momentum.
In her letter to shareholders, CEO Mary Barra highlighted the success of the company’s gasoline-powered trucks and SUVs, and shared that GM is gearing up to launch eight new or redesigned models in compact, mid-size, and full-size categories in North America. She emphasized that while GM is excited about its electric vehicle (EV) ventures, particularly the Chevrolet Equinox, the company is committed to maintaining disciplined growth.
Barra also mentioned earlier in the month that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company aims to remain flexible and respond to demand, although its EV sales did see growth in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, would abandon its Origin vehicle project after having to scale back operations due to a previous incident. Instead, Cruise will concentrate on using the next-generation Chevrolet Bolt while testing in Texas and Arizona. GM incurred a $600 million charge related to halting the Origin’s production in Detroit.
During an investor call, Barra indicated that utilizing the Bolt would address regulatory concerns associated with the unique design of the Origin, which lacks a steering wheel. This change is expected to reduce per unit costs and allow GM to optimize its resources.
“Our vision for transforming mobility with autonomous technology remains intact, and every mile driven, and every simulation brings us closer as Cruise operates as an AI-first company,” said Barra.
Furthermore, GM is in the process of restructuring its joint venture in China with SAIC Motor, facing ongoing losses, which included a $104 million loss in the second quarter. Production was cut by 70% in June, with SAIC-GM delivering only 26,000 vehicles, which is a 50% decrease compared to the previous year.