General Motors has raised several financial forecasts for 2024 following strong performance that exceeded Wall Street expectations in the second quarter.
The Detroit-based automaker now anticipates adjusted earnings for the year to fall between $13 billion and $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has revised 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, which marks an increase of over 7% compared to last year and surpasses Wall Street’s expectations of $45 billion, as per FactSet estimates. Earnings per share stood at $3.06, exceeding analysts’ predictions of $2.71 per share and showing a 60% increase from 2023. Net income rose 14% to $2.9 billion, compared to $2.5 billion in the same quarter last year.
Following this news, GM’s stock rose nearly 5% during pre-market trading on Tuesday, bringing the stock’s increase to over 37% for the year. Additionally, GM declared a cash dividend for the third quarter, which has buoyed investor sentiment.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs, noting that the company is launching eight new or redesigned models in North America. She also mentioned the scaling production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined volume growth despite excitement surrounding electric vehicles (EVs).
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing the shortfall to a market slowdown. However, she noted that EV sales did see growth in the last quarter.
Barra also disclosed that Cruise, GM’s autonomous vehicle division, will discontinue its Origin self-driving vehicle and will focus on utilizing the next-generation Chevrolet Bolt to conduct tests in Texas and Arizona. This shift follows a $600 million charge taken by GM related to the suspension of Origin production in Detroit.
During a discussion with analysts, Barra explained that using the Chevrolet Bolt would address regulatory concerns associated with the Origin’s unconventional design, including its lack of a steering wheel. She added that this adjustment would help reduce costs and optimize resources for the company.
“Our vision to transform mobility using autonomous technology remains steadfast,” Barra stated. “Every mile traveled and every simulation moves us closer to our goal, as Cruise operates as an AI-first company.”
In addition, GM is taking steps to restructure its joint venture with SAIC Motor in China due to ongoing losses, which included a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, a 50% decrease from the previous year.