General Motors has increased several financial forecasts for 2024 after exceeding analysts’ expectations for its second quarter. The automotive giant now anticipates adjusted earnings for the year will reach between $13 billion and $15 billion, a rise from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has updated its targets for operating cash flow and earnings per share, while slightly lowering the 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% increase from the previous year, surpassing the Wall Street expectation of $45 billion. The company’s earnings per share also exceeded analyst forecasts at $3.06, significantly higher than the predicted $2.71, and 60% greater compared to the same period in 2023. Net income increased by 14% to $2.9 billion, compared to $2.5 billion last year.
As a result of these positive results, GM shares rose nearly 5% in pre-market trading on Tuesday, with the stock climbing over 37% this year. Furthermore, GM announced a third-quarter cash dividend after market close on Monday, contributing to the stock’s upward momentum.
In a letter to stakeholders, CEO Mary Barra highlighted the strong sales of the company’s gas-powered trucks and SUVs, as well as the planned launch of eight new or redesigned vehicle models in North America. She reaffirmed GM’s commitment to increasing the production of the electric Chevrolet Equinox while emphasizing the importance of disciplined growth in electric vehicle (EV) sales.
Barra mentioned earlier in the month that GM would not reach its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company plans to remain flexible and adapt production to meet demand, with EV sales showing growth last quarter.
Additionally, Barra announced that Cruise, GM’s autonomous driving unit, would discontinue its Origin vehicle following a previous incident that led to a reduction in operations. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM also incurred a $600 million charge associated with ceasing production of the Origin in Detroit.
During a discussion with analysts, Barra explained that transitioning to the Bolt would address regulatory concerns regarding the Origin’s unconventional design, including the absence of a steering wheel. This strategic shift is expected to reduce unit costs and enhance resource optimization.
GM is also undergoing a restructuring of its joint venture in China with SAIC Motor, as the company continues to face losses, including a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% lower than the same period last year.