General Motors is adjusting its financial forecasts for 2024 after exceeding Wall Street expectations in its second quarter results. The Detroit-based automaker has raised 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 improved its operating cash flow and earnings per share targets, though it slightly lowered the outlook for net income attributable to shareholders by less than 1%, now estimating it between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, which represents over a 7% increase from the same period last year and surpasses Wall Street expectations of $45 billion, according to FactSet. Earnings per share reached $3.06, exceeding analysts’ predictions of $2.71, and marking a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result of these strong performance indicators, GM shares rose nearly 5% in pre-market trading on Tuesday, with the stock appreciating more than 37% this year. Following the close of trading on Monday, GM also announced a third-quarter cash dividend, further boosting investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the success of the company’s gasoline-powered trucks and SUVs and noted that GM is set to launch eight new or redesigned vehicle models in North America. She also emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox while maintaining a focus on disciplined growth in electric vehicle (EV) production.
However, Barra had previously stated that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company aims to be flexible and produce according to demand, although its EV sales did see an increase last quarter.
Barra also announced that Cruise, GM’s autonomous vehicle division, would abandon its plans for the Origin vehicle, which had its operations curtailed after an incident last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing its autonomous driving systems in Texas and Arizona. GM has incurred a $600 million charge associated with halting Origin production in Detroit.
During a recent analyst call, Barra explained that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This adjustment will also help reduce costs per unit and optimize resources within the company.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, stating, “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.”
Additionally, GM is working on restructuring its joint venture in China with SAIC Motor, as it faces ongoing financial losses, having reported a $104 million loss for the second quarter. In June, the production output of the SAIC-GM partnership was cut by 70%, with only 26,000 vehicles delivered, representing a 50% decline compared to the previous year.