General Motors has revised its financial forecasts for 2024 after exceeding Wall Street expectations in its second quarter results. The Detroit-based automaker has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has uplifted its targets for operating cash flow and earnings per share, though it slightly lowered the net income forecast for shareholders by less than 1%, now projecting between $10 billion and $11.4 billion.
In its second quarter, GM reported revenue of $47.9 billion, marking an over 7% rise from the previous year and surpassing Wall Street’s $45 billion expectation according to FactSet estimates. The company’s earnings per share stood at $3.06, significantly above the anticipated $2.71 and reflecting a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, compared to $2.5 billion last year.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has increased over 37% throughout the year. Additionally, GM announced a cash dividend for the third quarter, contributing to the stock’s uplift.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gasoline-powered trucks and SUVs, emphasizing the launch of eight new or redesigned models across various categories in North America. Barra also confirmed that production of the electric Chevrolet Equinox is being scaled up, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
However, Barra mentioned earlier this month that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company plans to remain flexible and align production with demand, though it did report a growth in EV sales in the last quarter.
Barra also disclosed that Cruise, GM’s autonomous driving division which had previously scaled back operations after an incident last October, would discontinue its Origin vehicle. Instead, the company will focus on testing the next-generation Chevrolet Bolt in Texas and Arizona. GM incurred a $600 million charge related to the discontinuation of the Origin’s production in Detroit.
During a discussion with analysts, Barra indicated that utilizing the Bolt would address regulatory concerns associated with the Origin’s unconventional design, such as the absence of a steering wheel. This shift is expected to reduce unit costs and better allocate GM’s resources.
“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,” Barra stated.
In addition, GM is working on restructuring its joint venture in China with SAIC Motor, which has been experiencing financial losses; the company recorded a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is half the amount from the previous year, as reported by Automotive News.