General Motors has increased several financial forecasts for 2024 following strong performance that exceeded Wall Street estimates in the second quarter.
The automaker raised its adjusted earnings outlook for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. It also updated 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.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase from the previous year and surpassing the expected $45 billion according to FactSet estimates. Earnings per share stood at $3.06, exceeding the analyst expectation of $2.71 per share and showing a 60% increase compared to 2023. Net income grew by 14% to $2.9 billion, up from $2.5 billion.
GM’s stock experienced a nearly 5% rise in pre-market trading on Tuesday, bringing its total gains for the year to over 37%. The company announced a third-quarter cash dividend after Monday’s market close, which contributed to the stock’s positive movement.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She mentioned that the company is in the process of launching eight new or redesigned compact, mid-size, and full-size models in North America. Additionally, Barra indicated that GM is ramping up production of the electric Chevrolet Equinox, emphasizing the company’s commitment to “disciplined volume growth,” despite previously stating that GM will not reach its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns. However, the company did report an increase in electric vehicle sales last quarter.
Barra also revealed that Cruise, GM’s self-driving division, would discontinue its Origin vehicle model, refocusing efforts on the next-generation Chevrolet Bolt for testing in Texas and Arizona. The decision follows a $600 million charge associated with halting Origin production.
During a call with analysts, Barra expressed that using the Bolt should address regulatory concerns related to the unique design of the Origin. The switch is expected to reduce per unit costs and enhance resource optimization.
“Our vision to transform mobility using autonomous technology remains unchanged,” Barra stated, adding that each mile traveled and simulation brings Cruise closer to its goal, as the company continues to prioritize artificial intelligence in its operations.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, as it experiences ongoing losses, including a $104 million loss for the second quarter. In June, production cuts by SAIC-GM reduced output by 70%, resulting in the delivery of 26,000 vehicles—50% less than the previous year.