General Motors has updated its financial outlook for 2024 following a strong performance in the second quarter that exceeded Wall Street’s expectations. The automaker has increased its forecast for adjusted earnings to a range of $13 billion to $15 billion, an improvement from its earlier estimate of $12.5 billion to $14.5 billion. Additionally, it has raised targets for operating cash flow and earnings per share, while slightly lowering the outlook for net income attributable to shareholders to between $10 billion and $11.4 billion.
In terms of revenue, GM reported $47.9 billion for the second quarter, marking over a 7% increase compared to the same period last year and surpassing the $45 billion Wall Street predicted. Earnings per share reached $3.06, outperforming analyst expectations of $2.71 and representing a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following this news, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has seen an overall rise of more than 37% this year. After the market closed on Monday, GM announced a cash dividend for the third quarter, which likely contributed to the stock’s momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, mentioning the launch of eight new or redesigned models across various size categories in North America. She also discussed the scaling of production for the electric Chevrolet Equinox, emphasizing GM’s commitment to controlled growth in electric vehicle (EV) production despite acknowledging that the target of 1 million EVs by the end of 2025 will not be met due to a market slowdown.
Barra revealed that Cruise, GM’s self-driving division, will discontinue its Origin vehicle and will instead concentrate on using the next-generation Chevrolet Bolt for testing purposes in Texas and Arizona. This decision follows a $600 million charge taken by GM due to the halt in Origin production.
In addressing analysts, Barra stated that shifting to the Bolt would help mitigate regulatory concerns regarding the Origin’s unconventional design and reduce costs per unit. She reaffirmed GM’s dedication to advancing mobility through autonomous technology, reinforcing Cruise’s position as an AI-centric company.
Additionally, GM is working on restructuring its joint venture with SAIC Motor in China, which has been incurring losses. The company reported a $104 million loss for the second quarter, with SAIC-GM cutting production by 70% in June and delivering 26,000 vehicles, which is a 50% decrease compared to the previous year.