General Motors has raised its financial forecasts for 2024 after exceeding Wall Street expectations for its second quarter results.
The Detroit-based automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, compared to the previous estimate of $12.5 billion to $14.5 billion. GM also adjusted its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase from the previous year and surpassing the $45 billion anticipated by Wall Street analyst estimates. The company reported earnings per share of $3.06, significantly higher than the expected $2.71 and a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
GM’s stock rose by nearly 5% in pre-market trading on Tuesday, building on over a 37% increase this year. After Monday’s trading session, the company announced a cash dividend for the third quarter, further boosting its stock performance.
In her letter to shareholders, CEO Mary Barra highlighted the strong sales of GM’s gas-powered trucks and SUVs. She mentioned that the company is preparing to launch eight new or redesigned vehicles across various sizes in North America. Barra also discussed the scaling up of production for the electric Chevrolet Equinox, emphasizing that while GM is excited about its electric vehicles, it is committed to disciplined growth.
Earlier in the 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 stated it would remain flexible and “build to demand,” although it experienced an increase in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s autonomous driving unit, would discontinue its Origin vehicle following a setback in operations last October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM faced a $600 million charge related to the cessation of Origin production in Detroit.
During an analyst call, Barra explained that the decision to use the Bolt will address regulatory concerns regarding the Origin’s unconventional design, which lacks a steering wheel. This shift is expected to reduce costs per vehicle and improve resource management.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, stating that each mile and each simulation brings the company closer to achieving its goals. GM is also working on restructuring its joint venture with SAIC Motor in China as it copes with ongoing losses, having recorded a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, which is 50% less than the previous year.