General Motors is revising its financial outlook for 2024 following a strong second quarter performance that exceeded Wall Street forecasts. The automaker has adjusted its expected adjusted earnings for the year to range between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM 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.
The company reported revenue of $47.9 billion for the second quarter, marking a more than 7% rise compared to last year and surpassing the anticipated $45 billion according to FactSet estimates. Earnings per share were noted at $3.06, exceeding the analysts’ prediction of $2.71, and representing a 60% increase from 2023. Net income rose by 14% to $2.9 billion from $2.5 billion.
As a result of these developments, GM’s stock experienced a nearly 5% uptick in pre-market trading, contributing to a year-to-date increase of over 37%. After the market closed on Monday, GM also announced a cash dividend for the third quarter, further supporting the stock price.
In a message to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs while revealing plans to launch eight new or redesigned models across various sizes in North America. Barra emphasized GM’s commitment to disciplined volume growth in electric vehicle production, specifically mentioning the scaling of the electric Chevrolet Equinox. However, she acknowledged that the company would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in market demand.
Additionally, Barra announced changes within GM’s self-driving unit, Cruise, which will abandon its plans for the Origin vehicle in favor of using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a $600 million charge related to halting production of the Origin in Detroit. Barra stated that utilizing the Bolt would address regulatory concerns regarding the Origin’s design and help reduce costs.
Furthermore, GM is working on restructuring its joint venture in China with SAIC Motor, amid ongoing financial losses, including a reported loss of $104 million in the second quarter. Production cuts by SAIC-GM in June resulted in a 70% decrease, with only 26,000 vehicles delivered, reflecting a 50% drop compared to the previous year.