General Motors has upgraded several financial forecasts for 2024 following its impressive second-quarter performance that exceeded Wall Street expectations.
The Detroit-based automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. In addition, GM has adjusted its targets for operating cash flow and earnings per share. However, the expectation for net income attributable to shareholders has been slightly lowered by less than 1%, with the new range set between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. The company’s earnings per share reached $3.06, exceeding analysts’ expectations of $2.71 per share and representing a 60% increase from last year. Net income rose by 14%, totaling $2.9 billion, up from $2.5 billion.
Following the news, GM’s stock surged nearly 5% in pre-market trading on Tuesday, and the stock has experienced over a 37% increase this year. After the market closed on Monday, GM declared a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the robust performance of GM’s gas-powered trucks and SUVs, while revealing plans to launch eight new or redesigned vehicles across various segments in North America. She emphasized the company’s commitment to scaling production of the electric Chevrolet Equinox, asserting that GM remains dedicated to disciplined volume growth despite early successes in the electric vehicle (EV) market.
Earlier, Barra acknowledged that GM would not meet its target of producing 1 million EVs in North America by the end of 2025 due to a slowdown in the market. The company has adopted a flexible approach to production, stating it would “build to demand,” although EV sales did see growth in the last quarter.
Barra also announced that Cruise, GM’s autonomous vehicle division, has decided to discontinue its Origin vehicle following a rollback in operations after an incident last October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a $600 million charge associated with halting production of the Origin in Detroit.
During an analysts’ call, Barra mentioned that using the Bolt would address regulatory concerns regarding the Origin’s distinctive design, including its lack of a steering wheel. She explained that this change would reduce per unit costs and help GM optimize its resources.
“Our vision to transform mobility through autonomous technology remains steadfast. Each mile traveled and every simulation brings us closer to our goals, as Cruise is an AI-first company,” Barra stated.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, as it continues to face losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% lower than the previous year, as reported by Automotive News.