General Motors is increasing its financial forecasts for 2024 following impressive results that surpassed Wall Street expectations for its second quarter.
The automotive giant has adjusted its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share. Meanwhile, the outlook for net income attributable to shareholders has been slightly reduced, now estimated between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting an increase of more than 7% compared to the same period last year and exceeding Wall Street predictions of $45 billion, as per FactSet. Earnings per share rose to $3.06, surpassing the expected $2.71 and marking a 60% increase from 2023. Net income also grew by 14% to $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM’s stock surged nearly 5%. The stock has seen a growth of more than 37% this year. Following the market closure on Monday, GM announced a cash dividend for the third quarter, contributing to the stock’s rise.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned that the company is launching eight new or redesigned models across various sizes in North America. She also emphasized the scaling of production for the electric Chevrolet Equinox, stating, “As excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market. She affirmed that the company would adapt and “build to demand,” although electric vehicle sales did experience growth in the last quarter.
Additionally, Barra announced a shift for Cruise, GM’s self-driving division, which has had to scale back operations after an incident last October. Cruise will abandon its Origin vehicle and instead use the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the cessation of Origin production in Detroit.
During a conference call with analysts, Barra mentioned that utilizing the Bolt would address regulatory concerns related to the Origin’s distinct design, particularly its lack of a steering wheel. This adjustment is expected to lower unit costs and optimize resources for GM.
“Our vision to transform mobility using autonomous technology remains unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra stated.
GM is also working on restructuring its joint venture with SAIC Motor in China, as the partnership has been facing losses, reporting a $104 million loss in the second quarter. In June, SAIC-GM cut its production by 70%, delivering 26,000 vehicles, which is half of what was delivered the previous year, according to Automotive News.