General Motors (GM) has raised several financial forecasts for 2024 following a strong performance that exceeded Wall Street expectations in the second quarter.
The Detroit-based automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion, along with raising targets for operating cash flow and earnings per share. However, the outlook for net income attributable to shareholders has been slightly reduced by less than 1%, now expected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking more than a 7% increase compared to the same period last year and surpassing the Wall Street expectation of $45 billion, as per FactSet estimates. Earnings per share were reported at $3.06, exceeding analysts’ predictions of $2.71 per share and representing a 60% increase from 2023. Net income rose by 14% to $2.9 billion, compared to $2.5 billion the previous year.
Following this news, GM’s stock rose nearly 5% in pre-market trading on Tuesday, and the stock has seen an increase of over 37% this year. On Monday, GM announced a cash dividend for the third quarter, which contributed to the stock’s rise.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs, mentioning the launch of eight new or redesigned compact, mid-size, and full-size models in North America. She also referenced the ramp-up of production for the electric Chevrolet Equinox, stating, “As excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Earlier this month, Barra indicated that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market. The company plans to adapt its production based on demand, although its electric vehicle sales did see growth in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, which had to scale back operations following an incident last October, will no longer pursue its Origin vehicle project. Instead, Cruise will concentrate on using the next-generation Chevrolet Bolt while testing its self-driving technology in Texas and Arizona. GM incurred a $600 million charge related to the cessation of Origin production in Detroit.
During a call with analysts, Barra explained that utilizing the Bolt will address regulatory concerns regarding the Origin’s unconventional design, particularly its lack of a steering wheel. This pivot will also reduce costs per unit and aid GM in optimizing its resources.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, stating, “Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company.”
Moreover, GM is working to restructure its joint venture with SAIC Motor in China due to ongoing losses, which amounted to $104 million in the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, representing a 50% decrease from the prior year, according to Automotive News.