General Motors has increased several financial forecasts for 2024 following a strong performance in its second quarter, surpassing Wall Street expectations.
The Detroit-based automaker now anticipates adjusted earnings for the year to be between $13 billion and $15 billion, up from previous estimates of $12.5 billion to $14.5 billion. It also raised its projections for operating cash flow and earnings per share, though it slightly decreased the expectations for net income attributable to shareholders by less than 1%, forecasting it to be between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase compared to the same period last year and exceeding forecasts of $45 billion. Earnings per share reached $3.06, significantly higher than the expected $2.71, and a substantial 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM’s stock rose nearly 5%, bringing its total increase for the year to over 37%. Following the close of trading on Monday, GM also announced a cash dividend for the third quarter, contributing to the stock’s positive momentum.
In her letter to shareholders, CEO Mary Barra highlighted the strength of GM’s gas-powered trucks and SUVs while noting the company is launching eight new or redesigned models in North America. She confirmed that GM is ramping up the production of the electric Chevrolet Equinox, emphasizing the company’s commitment to “disciplined volume growth” despite earlier projections. However, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market challenges.
Barra also shared that Cruise, GM’s self-driving division, has decided to discontinue its Origin vehicle and will instead focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after Cruise had to scale back its operations following an incident last year. GM accounted for a $600 million expense related to the halt of the Origin’s production.
During an analysts’ call, Barra explained that using the Bolt addresses regulatory concerns linked to the unique design of the Origin, such as its absence of a steering wheel. The shift is also expected to reduce per-unit costs and optimize resource allocation.
“Our vision to transform mobility through autonomous technology remains steadfast, and each mile traveled and every simulation brings us closer since Cruise operates as an AI-first company,” Barra stated.
Moreover, GM is working to restructure its joint venture with SAIC Motor in China, as the partnership has been facing losses, including a $104 million loss in the second quarter. Production cuts by SAIC-GM in June resulted in a 70% decrease, with 26,000 vehicles delivered, a 50% reduction from the previous year.