General Motors has updated its financial forecasts for 2024 after surpassing Wall Street’s expectations in the second quarter. The Detroit automaker increased its projected adjusted earnings for the year to between $13 billion and $15 billion, an improvement from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM raised its targets for operating cash flow and earnings per share, although it slightly lowered its forecast for net income attributable to shareholders to a range of $10 billion to $11.4 billion, a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, representing a more than 7% increase from the previous year and exceeding the expected $45 billion, according to FactSet estimates. The company’s earnings per share were $3.06, surpassing the anticipated $2.71, and reflecting a 60% increase compared to 2023. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Following these results, GM stock experienced nearly a 5% increase in pre-market trading on Tuesday, and the stock has risen over 37% this year. Additionally, GM declared a cash dividend for the third quarter after the market closed on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, along with the launch of eight new or redesigned models across various categories in North America. She also discussed the ramp-up of production for the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in electric vehicle (EV) sales despite a market slowdown that has made it unlikely for GM to meet its target of producing 1 million EVs in North America by the end of 2025.
In another strategic shift, Barra announced that Cruise, GM’s autonomous driving division, will discontinue its Origin vehicle model and instead focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a $600 million charge due to halting Origin production in Detroit. Barra indicated that this change would address regulatory concerns regarding the Origin’s design while also decreasing unit costs and optimizing resources.
Despite the challenges faced in China, where GM is working on restructuring its joint venture with SAIC Motor after reporting a $104 million loss in the second quarter, Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology. The company noted significant production cuts at SAIC-GM, with production down by 70% and vehicle deliveries falling 50% compared to the previous year.