General Motors is increasing its financial forecasts for 2024 following a strong performance that exceeded Wall Street’s expectations in the second quarter.
The Detroit-based automotive company now projects adjusted earnings for the year to be between $13 billion and $15 billion, an increase from its previous estimates of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders was slightly reduced to a range of $10 billion to $11.4 billion, down by less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. The company also announced earnings per share of $3.06, which exceeded the anticipated $2.71 and represented a 60% increase over 2023. Net income rose by 14%, reaching $2.9 billion compared to $2.5 billion in the prior year.
Following this news, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to an overall increase of over 37% this year. The company declared a cash dividend for the third quarter after the market closed on Monday, further elevating its stock value.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She mentioned plans to launch eight new or redesigned models across various categories in North America and emphasized the company’s commitment to scaling production of the electric Chevrolet Equinox. Barra expressed enthusiasm for GM’s electric vehicles (EVs) but noted that the company is focused on responsible growth.
Earlier this month, Barra acknowledged that GM is unlikely to meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns. Despite this, the company reported growth in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving unit that had to scale back operations following an incident last October, would abandon its Origin vehicle project. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the production halt of the Origin in Detroit.
During a call with analysts, Barra assured that the company remains committed to its vision of transforming mobility through autonomous technology. She stated that every mile traveled and simulation brings the company closer to its goals, emphasizing Cruise’s focus on AI technology.
Furthermore, GM is working on restructuring its joint venture in China with SAIC Motor as it continues to face losses. The company reported a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, which is 50% fewer than in the previous year, as reported by Automotive News.