General Motors has increased several financial forecasts for 2024 following strong performance that exceeded Wall Street’s expectations in the second quarter.
The Detroit-based automaker has raised its projected adjusted earnings for the year to between $13 billion and $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has updated its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
During the second quarter, GM reported revenue of $47.9 billion, marking over a 7% rise compared to the previous year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. The earnings per share reached $3.06, exceeding the analysts’ forecast of $2.71 per share and representing a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock saw a nearly 5% increase in pre-market trading, contributing to an overall rise of more than 37% for the year. After Monday’s trading closed, GM also declared a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the company’s success with gas-powered trucks and SUVs and noted the launch of eight new or redesigned models in North America. Barra emphasized GM’s commitment to disciplined growth in electric vehicle (EV) production, specifically scaling up the manufacturing of the electric Chevrolet Equinox. However, she acknowledged the company would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market.
Additionally, Barra revealed that Cruise, GM’s autonomous driving unit, has decided to abandon its Origin vehicle in favor of the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a previous incident that caused Cruise to scale back its operations. GM recorded a $600 million charge related to the halting of Origin production in Detroit. During an analyst call, Barra indicated that using the Bolt would address regulatory concerns about the Origin’s unique design and would help reduce costs while optimizing resources.
Finally, GM is also working on restructuring its joint venture with SAIC Motor in China, continuing to face financial losses; the company reported a $104 million loss for the second quarter. Recent production cuts by SAIC-GM saw a drop of 70%, with only 26,000 vehicles delivered, marking a 50% decline compared to the previous year.