General Motors has increased several financial forecasts for 2024 after exceeding Wall Street expectations for its second quarter performance. The automaker now anticipates adjusted earnings for the year to fall between $13 billion and $15 billion, a boost from the previous range of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, although net income expectations for shareholders have been slightly lowered by less than 1%, now projected between $10 billion and $11.4 billion.
For the second quarter, GM reported a revenue of $47.9 billion, marking over a 7% increase from the same period last year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. The company recorded earnings per share at $3.06, significantly above the anticipated $2.71 and representing a 60% increase year-over-year. Net income rose 14% to $2.9 billion, compared to $2.5 billion a year earlier.
Following these results, GM stock experienced a nearly 5% surge in pre-market trading on Tuesday, with an overall increase of more than 37% this year. The company also announced a third-quarter cash dividend after the market closed on Monday, contributing to the stock’s positive performance.
In a letter addressed to shareholders, CEO Mary Barra highlighted the strong sales of GM’s gas-powered trucks and SUVs. She noted that the company is launching eight new or redesigned models across various categories in North America. Barra expressed enthusiasm about scaling production of the electric Chevrolet Equinox, stating the company’s commitment to disciplined volume growth despite earlier admitting that GM will not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. However, electric vehicle sales did see growth in the last quarter.
Barra also revealed that Cruise, GM’s autonomous vehicle division, is discontinuing its Origin vehicle amidst previous operational challenges. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for its testing operations in Texas and Arizona. GM incurred a $600 million charge linked to the suspension of Origin production in Detroit.
During an analyst call, Barra indicated that transitioning to the Bolt would address regulatory concerns regarding the Origin’s unique design, such as its lack of a steering wheel. This shift is expected to reduce costs per unit and optimize GM’s resource allocation.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, stating that every journey taken and simulation conducted brings the company closer to this vision. Furthermore, GM is working to restructure its joint venture with SAIC Motor in China, which continues to face significant losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, a 50% decline compared to the same time last year, based on Automotive News reports.