General Motors has increased several financial forecasts for 2024 following strong second-quarter results that exceeded Wall Street projections. The Detroit-based automaker now anticipates adjusted earnings for the year to range between $13 billion and $15 billion, an upward revision from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly lowering the net income outlook for shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
The company reported second-quarter revenue of $47.9 billion, which marks a more than 7% increase compared to last year and surpasses the $45 billion forecast by analysts. Earnings per share reached $3.06, which exceeds the anticipated $2.71 and represents a 60% increase over 2023. Net income also grew by 14%, totaling $2.9 billion, compared to $2.5 billion in the previous year.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading, with a more than 37% increase recorded this year. The company also declared a cash dividend for the third quarter, further buoying investor confidence.
In a letter to shareholders, CEO Mary Barra emphasized the success of GM’s gas-powered trucks and SUVs, while outlining plans to launch eight new or redesigned vehicle models across various categories in North America. Barra highlighted the progress in scaling up production of the electric Chevrolet Equinox, reaffirming the company’s commitment to prudent growth in the EV sector, despite acknowledging that it would not meet the target of producing 1 million electric vehicles in North America by the end of 2025 due to market challenges. Nonetheless, EV sales did see an uptick in the last quarter.
Barra also shared updates regarding Cruise, GM’s self-driving unit, which has pivoted away from its Origin vehicle after scaling back operations due to a prior incident. The focus will now shift to utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after GM incurred a $600 million charge related to the cessation of Origin production.
During an analyst call, Barra explained that shifting to the Bolt would address regulatory concerns surrounding the unique design of the Origin, particularly its absence of a steering wheel. This adjustment is expected to decrease costs per unit and enhance resource optimization.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, having reported a $104 million loss for the second quarter. In June, the partnership, SAIC-GM, significantly reduced production by 70%, resulting in deliveries of only 26,000 vehicles, which is a 50% decline compared to the previous year.