General Motors is raising its financial expectations for 2024 after exceeding Wall Street predictions for its second quarter.
The company has updated its adjusted earnings forecast for the year to between $13 billion and $15 billion, an increase from the previous estimate 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 net income expectations for shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing a more than 7% increase from the previous year and surpassing the $45 billion anticipated by Wall Street, according to FactSet estimates. Earnings per share stood at $3.06, exceeding analysts’ expectations of $2.71, and marking a 60% increase compared to 2023. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to a year-to-date increase of over 37%. Additionally, GM declared a cash dividend for the third quarter, further boosting investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She mentioned that the company plans to launch eight new or redesigned models in North America and is scaling up production of the electric Chevrolet Equinox, emphasizing a commitment to disciplined growth in electric vehicle volume despite some challenges.
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 due to a market slowdown. The company’s electric vehicle sales did, however, see growth in the previous quarter.
Barra also announced a significant change for Cruise, GM’s self-driving unit, which has reassessed its operations following a setback last October. The company will discontinue the Origin vehicle and shift its focus to testing the next-generation Chevrolet Bolt in Texas and Arizona. GM took a $600 million hit related to the Origin’s production halt in Detroit.
During a call with analysts, Barra stated that utilizing the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacks a traditional steering wheel. This decision is expected to reduce costs per unit and enhance resource optimization.
Barra reiterated that GM’s vision for transforming mobility through autonomous technology remains steadfast, emphasizing that each mile traveled and simulation performed advances their progress as an AI-first company.
Moreover, GM is working to restructure its joint venture with SAIC Motor in China, as it continues to incur losses, recording a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, which is 50% less than in the previous year.