General Motors is adjusting its financial forecasts for 2024 following a strong performance exceeding Wall Street expectations in the second quarter.
The Detroit-based automaker has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous forecast of $12.5 billion to $14.5 billion. Additionally, it has raised its targets for operating cash flow and earnings per share, while slightly lowering its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, reflecting a more than 7% increase from the prior year and surpassing the Wall Street estimate of $45 billion, according to FactSet. Earnings per share reached $3.06, exceeding analyst expectations of $2.71 and marking a 60% increase compared to 2023. Net income climbed 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, bringing its year-to-date increase to over 37%. The company also declared a third-quarter cash dividend after trading closed on Monday, which contributed to the stock’s rise.
In her letter to shareholders, CEO Mary Barra highlighted the strong demand for GM’s gas-powered trucks and SUVs, and mentioned the launch of eight new or redesigned models in North America. She also indicated that GM is ramping up production of the electric Chevrolet Equinox while balancing growth in electric vehicle (EV) production. Despite earlier optimism, Barra noted that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown.
Additionally, Barra announced changes for Cruise, GM’s self-driving unit, which will pivot away from the Origin vehicle and instead focus on the next-generation Chevrolet Bolt. This decision comes after Cruise had to pause operations following a previous incident. The use of the Bolt is intended to alleviate regulatory concerns about the Origin’s design and is expected to help reduce costs.
Barra reaffirmed GM’s commitment to using autonomous technology for future mobility, stating, “every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company.”
Lastly, GM is reevaluating its joint venture with SAIC Motor in China, as the venture reported a $104 million loss in the second quarter, with production cut by 70% and deliveries down by 50% year-over-year.