General Motors has adjusted its financial forecasts for 2024 following a strong performance in the second quarter, surpassing Wall Street expectations.
The automaker has increased its forecast for adjusted earnings this year to a range of $13 billion to $15 billion, compared to the prior estimate of $12.5 billion to $14.5 billion. Additionally, GM raised its goals for operating cash flow and earnings per share, though it slightly lowered its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenues of $47.9 billion, marking a year-over-year increase of over 7% and exceeding Wall Street’s anticipated $45 billion, based on FactSet estimates. The company earned $3.06 per share, surpassing the $2.71 forecasted by analysts and reflecting a 60% increase from 2023. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Consequently, GM’s stock surged nearly 5% in pre-market trading, having increased by more than 37% this year. Following the close of trading on Monday, GM also announced a third-quarter cash dividend, which contributed to the uptick in stock value.
In a letter to shareholders, CEO Mary Barra emphasized the strong performance of GM’s gas-powered trucks and SUVs. She highlighted the company’s plans to launch eight new or redesigned models in North America, including scaling production of the electric Chevrolet Equinox. Barra reiterated GM’s commitment to disciplined growth in the electric vehicle (EV) sector, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
However, Barra recently 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 market slowdown. The company has expressed its intention to “build to demand,” even as it noted an increase in EV sales last quarter.
Barra also shared that Cruise, GM’s autonomous driving division, would discontinue its Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a previous setback that forced Cruise to limit its operations after an incident last October, leading to a $600 million charge related to halting production of the Origin in Detroit.
During an analyst call, Barra noted that using the Bolt would alleviate regulatory concerns associated with the Origin’s design features, such as the absence of a steering wheel. This adjustment is expected to lower costs per unit and help GM optimize its resources.
“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,” she stated.
Additionally, GM is restructuring its joint venture with SAIC Motor in China due to ongoing losses, reporting a loss of $104 million for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% lower than the previous year, according to Automotive News.