General Motors has updated its financial forecasts for 2024 after exceeding Wall Street’s expectations for its second quarter performance.
The automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly lowering its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% year-over-year increase and surpassing the anticipated $45 billion, according to FactSet estimates. The company’s earnings per share reached $3.06, exceeding the expected $2.71 and marking a 60% increase compared to 2023. Net income rose by 14%, amounting to $2.9 billion, up from $2.5 billion.
Following the announcements, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has seen an overall increase of more than 37% this year. Additionally, GM declared a third-quarter cash dividend on Monday, further boosting its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the company’s success with gas-powered trucks and SUVs and mentioned plans to launch eight new or redesigned models in North America. Barra also discussed GM’s efforts to scale production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined volume growth.
Earlier in the month, Barra announced that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company plans to be flexible with its production strategy and “build to demand,” although its EV sales saw growth last quarter.
Furthermore, Barra indicated that Cruise, GM’s self-driving unit, would discontinue its Origin vehicle and focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows the production halt of the Origin, incurring a $600 million charge for GM, with the new approach expected to address regulatory concerns regarding the Origin’s design and help optimize resources.
“Our vision to transform mobility using autonomous technology is unchanged,” Barra stated, noting that each mile traveled and every simulation brings Cruise closer to its goals as an AI-first company.
In addition to these developments, GM is working on restructuring its joint venture with SAIC Motor in China, as it has been facing losses, including a reported $104 million loss in the second quarter. SAIC-GM reduced production by 70% in June, delivering 26,000 vehicles, which is a 50% decrease compared to the previous year.