General Motors has updated its financial forecasts for 2024 following a strong second quarter, which exceeded analysts’ expectations. The Detroit-based automaker has increased its projected adjusted earnings for the year to between $13 billion and $15 billion, up from an earlier 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 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, marking a more than 7% increase compared to the same period last year and surpassing the anticipated $45 billion, according to FactSet estimates. Earnings per share stood at $3.06, exceeding the expected $2.71 per share and representing a 60% increase from 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
GM’s stock rose nearly 5% in pre-market trading on Tuesday and has increased over 37% since the beginning of the year. Following the close of trading on Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra emphasized the strong performance of the company’s gas-powered trucks and SUVs, noting that GM is launching eight new or redesigned models, including compact, mid-size, and full-size vehicles in North America. She also highlighted the ramp-up in production for the all-electric Chevrolet Equinox, reaffirming GM’s commitment to disciplined growth in electric vehicle production.
However, Barra stated earlier this month that GM is unlikely to meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company plans to be flexible and “build to demand,” although its electric vehicle sales did see an increase last quarter.
In other developments, Barra announced that the company’s self-driving unit, Cruise, would discontinue the Origin vehicle and instead focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This pivot came after Cruise faced challenges with its operations following an incident last October. GM incurred a $600 million charge linked to the cessation of Origin production in Detroit.
During an analyst call, Barra mentioned that transitioning to the Bolt model will address regulatory concerns regarding the Origin’s unique design features, such as the absence of a steering wheel. This change is expected to reduce costs per unit and optimize resource allocation.
Additionally, GM is working on restructuring its joint venture in China with SAIC Motor, which has resulted in ongoing losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, reflecting a 50% decline from the previous year, according to reports.