General Motors is adjusting its financial forecasts for 2024 following impressive second-quarter results that exceeded Wall Street’s expectations. The Detroit-based company has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM updated its projections for operating cash flow and earnings per share, while slightly lowering the expected net income attributable to shareholders by under 1%, bringing it to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% rise from the same period last year and surpassing Wall Street’s anticipated $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding the $2.71 forecast by analysts and representing a 60% increase compared to 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM shares surged nearly 5%, with the stock up over 37% so far this year. The company also declared a third-quarter cash dividend, which contributed to the stock’s rally.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, mentioning plans to launch eight new or redesigned models in North America. She also addressed the ramp-up in production of the electric Chevrolet Equinox, expressing that while GM is enthusiastic about its electric vehicles (EVs) and early successes, it remains dedicated to disciplined volume growth.
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 slowdown in the market. She emphasized the company’s flexibility to “build to demand,” although EV sales did see growth in the last quarter.
Furthermore, Barra revealed that Cruise, GM’s self-driving division which previously scaled back operations after an incident last October, would discontinue its Origin vehicle. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing its vehicles in Texas and Arizona. GM incurred a $600 million charge related to the suspension of Origin production in Detroit.
During a conference call with analysts, Barra stated that using the Bolt would help mitigate any regulatory concerns regarding the unique design features of the Origin, such as the absence of a steering wheel. This transition will also reduce per-unit costs and enable GM to optimize its resources.
“Our vision to transform mobility through autonomous technology remains unchanged, and each mile traveled and simulation brings us closer because Cruise is an AI-first company,” Barra said.
In addition, GM aims to restructure its joint venture with SAIC Motor in China due to ongoing losses. The company reported a $104 million loss for the second quarter, with SAIC-GM having cut production by 70% in June, resulting in the delivery of only 26,000 vehicles—50% less than the previous year, as reported by Automotive News.