General Motors has increased several financial forecasts for 2024 after exceeding Wall Street expectations for its second quarter results.
The Detroit-based automaker has raised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, compared to the previous outlook of $12.5 billion to $14.5 billion. Additionally, it has 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, marking an increase of over 7% from the same period last year and exceeding Wall Street’s estimate of $45 billion, according to FactSet. The company’s earnings per share reached $3.06, surpassing the analyst expectation of $2.71 per share and reflecting a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to a more than 37% increase in stock value this year. After the market closed on Monday, GM announced a cash dividend for the third quarter, which further boosted share prices.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of its gas-powered trucks and SUVs. She announced plans to launch eight new or redesigned compact, mid-size, and full-size models in North America and mentioned scaling up production of the electric Chevrolet Equinox. Barra reiterated the company’s commitment to disciplined volume growth in their electric vehicle (EV) initiative, even as she acknowledged that GM would not achieve its goal of producing 1 million EVs in North America by the end of 2025, mainly due to a slowdown in the market.
Additionally, Barra revealed that Cruise, GM’s self-driving unit, will abandon its Origin vehicle project, opting to utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona instead. This decision follows a $600 million charge related to halting production of the Origin in Detroit.
Barra noted that transitioning to the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacks a traditional steering wheel. This change is also expected to reduce per unit costs and improve resource optimization.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra stated.
Moreover, GM is working to restructure its joint venture in China with SAIC Motor, which has been struggling with losses, reporting a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is half of what it sold during the same period last year, according to Automotive News.