General Motors is updating its financial forecasts for 2024 after exceeding Wall Street’s expectations in its second quarter results.
The Detroit-based automaker has revised 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 has raised its targets for operating cash flow and earnings per share, although it slightly reduced its net income expectation for shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
For the second quarter, GM reported revenue of $47.9 billion, which represents a growth of over 7% compared to the same period last year, surpassing Wall Street’s expectation of $45 billion. Earnings per share stood at $3.06, exceeding the anticipated $2.71 and marking a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
As a result of these positive figures, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has increased by more than 37% this year. Following the market close on Monday, GM announced a cash dividend for the third quarter, contributing to the stock’s momentum.
In a letter to shareholders, CEO Mary Barra highlighted the popularity of GM’s gas-powered trucks and SUVs and mentioned that the company plans to launch eight new or redesigned models in North America across various size categories. She also emphasized GM’s production growth for the electric Chevrolet Equinox, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Earlier in the month, Barra acknowledged that GM would not achieve its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. She indicated that the company would take a flexible approach to production, focusing on building vehicles according to demand, although EV sales showed growth in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving subsidiary, would abandon its plans for the Origin vehicle following an operational rollback due to an incident last October. Instead, the company will concentrate on testing next-generation Chevrolet Bolts in Texas and Arizona. GM incurred a $600 million charge related to the discontinued production of the Origin in Detroit.
During a call with analysts, Barra noted that using the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. She added that this decision would help reduce production costs and allow GM to better utilize its resources.
Barra reaffirmed GM’s ambition to innovate in mobility through autonomous technology, stating, “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.”
Moreover, GM is working to restructure its joint venture with SAIC Motor in China amid ongoing losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, which is 50% fewer than the same period last year.