General Motors has raised its financial forecasts for 2024 after exceeding Wall Street’s expectations for its second quarter. The automaker has adjusted its projected adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share, while expectations for net income attributable to shareholders have slightly decreased by less than 1%, now projected to be between $10 billion and $11.4 billion.
In the second quarter, GM’s revenue reached $47.9 billion, marking a more than 7% rise compared to the previous year and surpassing Wall Street’s expectation of $45 billion, according to FactSet. Earnings per share were reported at $3.06, exceeding the anticipated $2.71 per share and showing a 60% increase from 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
Following this news, GM’s stock price increased nearly 5% in pre-market trading on Tuesday, contributing to a more than 37% rise in the stock this year. Additionally, GM declared a third-quarter cash dividend after the market closed on Monday, which further buoyed the stock.
In her letter to shareholders, CEO Mary Barra emphasized the success of GM’s gas-powered trucks and SUVs. She highlighted the company’s plans to launch eight new or redesigned vehicle models in North America and also noted the scaling production of the electric Chevrolet Equinox. Barra assured shareholders that while GM is excited about its electric vehicle (EV) initiatives, it remains focused on disciplined volume 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, attributing this to a market slowdown. The company has stated it will be flexible and “build to demand,” despite a rise in EV sales in the last quarter.
Additionally, Barra revealed that GM’s autonomous driving unit, Cruise, will discontinue its Origin vehicle in favor of the next-generation Chevrolet Bolt for testing in Texas and Arizona. This change comes after the Origin faced operational challenges. GM incurred a $600 million charge related to the suspension of Origin production in Detroit.
During a call with analysts, Barra mentioned that using the Bolt would address regulatory concerns related to the Origin’s distinctive design, particularly its absence of a steering wheel. This shift is expected to reduce per-unit costs and help GM better allocate its resources.
GM is also working to restructure its joint venture in China with SAIC Motor, facing ongoing losses, with a reported $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, a 50% decrease compared to the previous year.