General Motors has updated its financial forecasts for 2024 following a strong performance in the second quarter that exceeded Wall Street expectations.
The Detroit-based automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, compared to 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. However, the forecast for net income attributable to shareholders has been slightly adjusted downwards by less than 1%, now estimated between $10 billion and $11.4 billion.
GM reported second-quarter revenues of $47.9 billion, marking a more than 7% increase from the previous year, surpassing the $45 billion anticipated by analysts according to FactSet estimates. Earnings per share reached $3.06, significantly higher than the expected $2.71 and representing a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock price rose nearly 5% in pre-market trading on Tuesday, with an overall increase of more than 37% this year. The company also announced a third-quarter cash dividend after trading closed on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of its gasoline-powered trucks and SUVs, noting the launch of eight new or redesigned compact, mid-size, and full-size models in North America. Barra emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox, stating the company remains dedicated to measured volume growth despite earlier comments indicating they would not meet the target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. Still, the company’s EV sales did see growth last quarter.
Barra also shared that Cruise, GM’s self-driving division that faced setbacks after a 2022 incident, will discontinue its Origin vehicle model. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona, following a $600 million charge related to the pause in Origin production.
During a call with analysts, Barra remarked that shifting to the Bolt would address regulatory concerns regarding the Origin’s unique design, including its absence of a steering wheel. This transition will help reduce costs per unit and optimize resource allocation.
Despite these advancements, GM is still working to restructure its joint venture with SAIC Motor in China, as it continues to face losses. The company reported a $104 million loss for the second quarter, with SAIC-GM reducing production by 70% in June and delivering 26,000 vehicles, a decline of 50% compared to the previous year.