General Motors (GM) has updated its financial forecasts for 2024 following impressive second-quarter results that exceeded Wall Street projections.
The Detroit-based automaker has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, compared to its previous forecast of $12.5 billion to $14.5 billion. It has also adjusted its targets for operating cash flow and earnings per share. However, the expectations for net income attributed to shareholders have been slightly lowered to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, which is over a 7% increase from the same period last year and surpasses the $45 billion forecast by analysts, as reported by FactSet. The earnings per share were recorded at $3.06, exceeding analyst expectations of $2.71 and representing a 60% rise from 2023. The net income saw a growth of 14%, reaching $2.9 billion, up from $2.5 billion.
Following this announcement, GM’s stock rose nearly 5% in pre-market trading on Tuesday. The company’s shares have appreciated more than 37% throughout the year. After the market closed on Monday, GM announced a cash dividend for the third quarter, which further boosted investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She mentioned that the company is on track to launch eight new or redesigned models in various categories in North America. Additionally, she indicated that production of the electric Chevrolet Equinox is being scaled up, emphasizing the company’s dedication to “disciplined volume growth” despite previous challenges.
Barra had earlier acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. However, she stated that the company would remain flexible and adapt production to meet demand, noting that EV sales increased in the last quarter.
Moreover, Barra announced that Cruise, GM’s autonomous vehicle division, would discontinue its Origin vehicle following a recent operational setback. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the cessation of Origin production in Detroit.
During a call with analysts, Barra explained that using the Bolt would resolve regulatory concerns regarding the Origin’s distinctive design, which lacks a traditional steering wheel. This shift is expected to reduce per unit costs and enhance resource optimization.
Barra reiterated the company’s commitment to transforming mobility through autonomous technology, stating that “every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company.”
Additionally, GM is working on restructuring its joint venture with SAIC Motor in China, which has been facing losses. The company reported a $104 million loss during the second quarter. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, a 50% decline compared to the previous year.