General Motors is adjusting its financial forecast for 2024 after exceeding Wall Street expectations for the second quarter. The Detroit-based automaker has raised its anticipated adjusted earnings for the year to between $13 billion and $15 billion, an increase from its previous estimate of $12.5 billion to $14.5 billion. Additionally, it has revised its targets for operating cash flow and earnings per share, while expectations for net income attributable to shareholders have been slightly lowered to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, a rise of over 7% compared to the previous year, surpassing Wall Street’s $45 billion estimate. Earnings per share reached $3.06, exceeding the forecast of $2.71 and representing a 60% increase from 2023. Net income grew 14%, rising to $2.9 billion from $2.5 billion.
Following this news, GM’s stock rose nearly 5% in pre-market trading, marking a 37% increase for the year. The company also declared a third-quarter cash dividend following market close on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra praised the performance of GM’s gas-powered trucks and SUVs and announced plans to launch eight new or redesigned models in North America. She emphasized the company’s commitment to disciplined growth in electric vehicle (EV) production, highlighting the ramp-up of the electric Chevrolet Equinox. However, she 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, stating that the company will adapt to demand while EV sales showed growth last quarter.
Barra also shared updates on Cruise, GM’s self-driving unit, which previously had to scale back operations after an incident last October. The unit will abandon its Origin vehicle design and will instead implement the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the discontinuation of the Origin production in Detroit.
During an analyst call, Barra reassured stakeholders that using the Bolt addresses regulatory concerns related to the Origin’s unconventional design, while also reducing costs and optimizing resources. She reaffirmed GM’s vision to transform mobility through autonomous technology, stating that every mile and simulation brings them closer to that goal.
Moreover, GM is working on restructuring its joint venture in China with SAIC Motor, where it has been experiencing losses. The company reported a $104 million loss for the second quarter, with SAIC-GM significantly reducing production by 70% in June, delivering only 26,000 vehicles, which is a 50% decrease from the previous year.