General Motors has raised its financial forecasts for 2024, following an impressive performance that surpassed Wall Street’s expectations for its second quarter.
The Detroit-based automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous forecast of $12.5 billion to $14.5 billion. Additionally, it has lifted its targets for operating cash flow and earnings per share. Meanwhile, expectations for net income attributable to shareholders were slightly adjusted downward by less than 1%, now estimated between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a rise of over 7% compared to the same period last year, and exceeding Wall Street’s expectations of $45 billion, according to FactSet estimates. The company’s earnings per share stood at $3.06, surpassing analysts’ predictions of $2.71 per share and representing a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result of the positive earnings report, GM’s stock saw an increase of nearly 5% in pre-market trading on Tuesday, with an overall rise of more than 37% this year. The company also announced a cash dividend for the third quarter, which bolstered stock performance.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned the upcoming launch of eight new or redesigned models in North America. She also indicated that the company is ramping up production of the electric Chevrolet Equinox, expressing excitement about the success of its electric vehicles while emphasizing the importance of disciplined growth.
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. She stated the company would adapt by building to market demand, although EV sales did see growth in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving unit, would abandon plans for its Origin vehicle following an operational rollback last October. Instead, Cruise will focus on testing next-generation Chevrolet Bolt vehicles in Texas and Arizona. GM incurred a $600 million charge for halting Origin production in Detroit.
During a call with analysts, Barra mentioned that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design. This change is also expected to reduce per unit costs and help streamline resources.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, stating that each mile and simulation advances the company’s goals, positioning Cruise as an AI-centered enterprise.
Finally, GM is working on restructuring its joint venture in China with SAIC Motor, which has been performing poorly. The company reported a $104 million loss in the second quarter. In June, SAIC-GM scaled back production by 70%, delivering 26,000 vehicles, which is 50% less than the same period last year.