General Motors is revising its financial forecasts for 2024 after exceeding Wall Street’s expectations in the second quarter. The Detroit-based automaker has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has improved its projections for operating cash flow and earnings per share; however, it slightly lowered its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% growth compared to the same period last year and surpassing Wall Street expectations of $45 billion, based on FactSet data. The earnings per share stood at $3.06, exceeding the anticipated $2.71 and marking a 60% increase over 2023. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
As a result of these strong performance metrics, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has increased over 37% this year. Following the close of trading on Monday, GM announced a third-quarter cash dividend, positively impacting the stock price.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gasoline-powered trucks and SUVs, mentioning that GM is set to launch eight new or redesigned models across compact, mid-size, and full-size categories in North America. She also indicated that production of the electric Chevrolet Equinox is ramping up, emphasizing that despite the excitement surrounding electric vehicles (EVs) and their initial success, GM is committed to disciplined growth in volume.
Earlier this month, Barra acknowledged 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 remain flexible and produce according to demand, even as EV sales rose in the last quarter.
Barra also disclosed that Cruise, GM’s autonomous vehicle subsidiary, would discontinue its Origin vehicle model, shifting focus to the next-generation Chevrolet Bolt for testing purposes in Texas and Arizona. This decision followed a halt in production of the Origin after an incident in October. GM recorded a $600 million charge related to this production suspension.
During a recent analyst call, Barra expressed that switching to the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This pivot is also expected to reduce per-unit costs and enable GM to optimize resources.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, stating that “every mile traveled, and every simulation, brings us closer” to that goal, emphasizing that Cruise remains an AI-first company.
Furthermore, GM is working on restructuring its joint venture with SAIC Motor in China, as it has suffered losses, including a $104 million loss reported for the second quarter. Production reductions by SAIC-GM resulted in a 70% cut, with only 26,000 vehicle deliveries, which is 50% lower than the previous year, according to reports.