General Motors has raised its financial outlook for 2024 following impressive second-quarter results that exceeded Wall Street expectations.
The Detroit-based automaker has adjusted its forecast for adjusted earnings to between $13 billion and $15 billion, an increase from the previous range 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 lowered expectations for net income attributable to shareholders to a range of $10 billion to $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase compared to the previous year and surpassing Wall Street’s expectation of $45 billion. Earnings per share stood at $3.06, exceeding the anticipated $2.71 and showing a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock experienced a nearly 5% jump in pre-market trading, with shares having risen over 37% this year. GM declared a cash dividend for the third quarter after trading closed on Monday, further boosting investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the strong performance of the company’s gas-powered trucks and SUVs while detailing plans to launch eight new or redesigned models in North America. Barra expressed excitement about the ramp-up of the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined growth in electric vehicle production, despite acknowledging 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 market slowdown.
Barra also announced that GM’s self-driving unit, Cruise, would be discontinuing the Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a production halt for the Origin after a previous incident. GM incurred a $600 million charge related to the suspension of the Origin’s production in Detroit.
During an analyst call, Barra indicated that using the Bolt would address regulatory concerns regarding the Origin’s unique design and would also reduce per-unit costs while optimizing resources.
“Our vision to transform mobility using autonomous technology remains unchanged, and each mile traveled brings us closer to achieving that goal,” Barra stated.
In addition, GM is working to restructure its joint venture with SAIC Motor in China, having reported a loss of $104 million for the second quarter. Production cuts by SAIC-GM in June led to a 70% reduction, resulting in the delivery of 26,000 vehicles, a 50% decrease from the previous year.