General Motors is updating its financial outlook for 2024 after exceeding Wall Street expectations in its second quarter results.
The Detroit-based automaker has raised its forecast for adjusted earnings this year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. The company also increased its projections 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, surpassing the anticipated $45 billion and reflecting a more than 7% increase from the previous year, according to FactSet estimates. Earnings per share reached $3.06, exceeding the expected $2.71 and representing a 60% increase compared to 2023. Additionally, net income rose 14% to $2.9 billion, up from $2.5 billion.
Following these updates, GM’s stock rose nearly 5% in pre-market trading on Tuesday, and the shares have appreciated over 37% this year. The company also declared a third-quarter cash dividend after Monday’s trading, contributing to the stock’s positive performance.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of GM’s gas-powered trucks and SUVs, noting plans to launch eight new or redesigned models across different vehicle categories in North America. She emphasized that while the company is excited about its electric vehicle (EV) plans, it is also committed to disciplined growth.
Despite earlier ambitions to produce 1 million electric vehicles in North America by the end of 2025, Barra indicated that GM may not meet this target due to a slowdown in the market. The company is adopting a flexible production strategy based on demand, although it did see an increase in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving unit, would stop the production of its Origin vehicle design and instead focus on using the Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge associated with halting the Origin’s production in Detroit. During a call with analysts, Barra mentioned that utilizing the Bolt should alleviate regulatory concerns regarding the Origin’s unique design features, such as its absence of a steering wheel, while also reducing costs and optimizing resources.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, emphasizing that each phase of testing and simulation brings the company closer to its goals.
Moreover, GM is working to restructure its joint venture with SAIC Motor in China, as the partnership continues to incur losses, reporting a $104 million loss for the second quarter. Production cuts by SAIC-GM in June reached 70%, with vehicle deliveries falling by 50% compared to the previous year.