General Motors is updating its financial outlook for 2024 after exceeding Wall Street’s expectations in its second quarter results.
The Detroit-based automaker has raised its forecast for adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous range of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share. However, it slightly lowered its expectations for net income attributable to shareholders by less than 1%, now projecting it to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting an increase of over 7% compared to the previous year and surpassing the $45 billion estimate from Wall Street, according to FactSet. Earnings per share stood at $3.06, exceeding the anticipated $2.71 and marking a 60% rise compared to 2023. The company’s net income surged by 14% to $2.9 billion, up from $2.5 billion in the prior year.
Following these results, GM’s stock rose nearly 5% in pre-market trading Tuesday, having increased more than 37% since the start of the year. GM also announced a cash dividend for the third quarter, which contributed to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and indicated that the company plans to launch eight new or revamped models across compact, mid-size, and full-size categories in North America. She also mentioned the scaling of production for the electric Chevrolet Equinox, assuring shareholders of GM’s commitment to disciplined growth in electric vehicle production.
Earlier this month, Barra noted 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. Nevertheless, the company remains adaptable and intends to “build to demand,” although its EV sales did see growth in the last quarter.
Barra also revealed that Cruise, GM’s self-driving division which had previously scaled back its operations following an incident last October, would no longer pursue its Origin vehicle. Instead, Cruise will focus on testing the next-generation Chevrolet Bolt in Texas and Arizona. GM incurred a $600 million charge due to the halt in production of the Origin in Detroit.
During a call with analysts, Barra emphasized that using the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacks a steering wheel. This change is also expected to reduce costs per unit and help GM optimize its resources.
“Our vision to transform mobility using autonomous technology remains intact, and each mile traveled and simulation gets us closer to realizing it, as Cruise operates as an AI-first company,” she stated.
GM is also working to restructure its joint venture in China with SAIC Motor, as it continues to face losses. The company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, a 50% decrease compared to the same period last year, according to reports.