General Motors is raising its financial forecasts for 2024 after exceeding analysts’ expectations in its second quarter results.
The automaker has adjusted its expected adjusted earnings for the year to between $13 billion and $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, it has increased 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.
GM reported second-quarter revenue of $47.9 billion, a more than 7% increase year-over-year, surpassing Wall Street’s $45 billion estimate. Earnings per share reached $3.06, exceeding analyst expectations of $2.71 and up 60% from the previous year. Net income rose 14% to $2.9 billion, compared to $2.5 billion a year earlier.
Following this announcement, GM’s stock rose nearly 5% in pre-market trading on Tuesday, continuing its upward trend of over 37% this year. The company also declared a third-quarter cash dividend after the market closed on Monday, contributing to the stock’s increase.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs and noted plans to launch eight new or redesigned models in North America. She emphasized the company’s commitment to disciplined growth in the production of 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 this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the close of 2025 due to a slowing market. The company intends to adapt its production to align with demand, although its electric vehicle sales did see growth last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle, opting to utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after a $600 million charge related to the halt in Origin production in Detroit.
During a call with analysts, Barra suggested that using the Bolt would address regulators’ concerns regarding the Origin’s unconventional design without a steering wheel. She also mentioned that this change would lower costs per unit and help optimize GM’s resources.
“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,” Barra expressed.
Furthermore, GM is working on restructuring its joint venture in China with SAIC Motor as it continues to face financial losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70% and delivered only 26,000 vehicles, which is a 50% decline compared to the same period last year.