General Motors has revised its financial forecasts for 2024 upward, surpassing Wall Street’s predictions for its second quarter results. The Detroit-based automaker now expects its adjusted earnings to range between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. In addition, GM has raised its targets for operating cash flow and earnings per share, although it slightly lowered the net income estimate for shareholders to between $10 billion and $11.4 billion, a reduction of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, which reflects a year-over-year increase of over 7% and exceeds the anticipated $45 billion by analysts. Earnings per share reached $3.06, significantly above the expected $2.71 and marking a 60% increase from 2023. The company’s net income rose by 14% to $2.9 billion, compared to $2.5 billion last year.
Following these positive results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to a year-to-date increase of over 37%. Moreover, GM announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of the company’s gas-powered trucks and SUVs. She also mentioned plans to launch eight new or redesigned models across various categories in North America. Barra emphasized GM’s commitment to disciplined volume growth as the company expands production of its electric Chevrolet Equinox. However, she noted that GM would not achieve its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market.
Additionally, Barra revealed that Cruise, GM’s self-driving technology division, will abandon its Origin vehicle, instead opting to use the next-generation Chevrolet Bolt for tests in Texas and Arizona. This shift follows a $600 million charge associated with pausing the production of the Origin in Detroit. Barra stated that this change will address regulatory concerns related to the Origin’s unique design and help reduce costs.
Finally, GM is actively working to restructure its joint venture in China with SAIC Motor as the company continues to face losses, which included a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, representing a 50% decrease compared to the previous year.