General Motors has increased its financial forecasts for 2024 after exceeding Wall Street’s projections for its second-quarter performance.
The Detroit-based automaker has raised its expected 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. Additionally, GM has revised its targets for operating cash flow and earnings per share, while slightly decreasing its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a reduction of less than 1%.
For the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase from the previous year and surpassing Wall Street’s $45 billion forecast, as per FactSet estimates. The company’s earnings per share stood at $3.06, exceeding the analyst expectation of $2.71 and marking a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has risen over 37% this year. The company’s stock was also boosted after it declared a third-quarter cash dividend following Monday’s market closure.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She announced plans to introduce eight new or redesigned models across different segments in North America. Barra emphasized that GM is ramping up production of the electric Chevrolet Equinox, reinforcing the company’s commitment to disciplined growth in its electric vehicle (EV) segment, despite acknowledging earlier this month that it would not meet its target of producing 1 million EVs in North America by the end of 2025 due to a market slowdown. Nonetheless, GM’s EV sales grew in the last quarter.
Barra also declared that Cruise, GM’s self-driving unit which had to scale back operations after an incident last October, will discontinue its Origin vehicle project. Instead, the focus will shift to using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the suspension of Origin production in Detroit.
During an analyst conference, Barra indicated that using the Chevrolet Bolt for testing would address regulators’ concerns regarding the Origin’s unconventional design, such as the absence of a steering wheel. This shift is anticipated to lower costs per unit and enhance resource optimization.
“Our vision to transform mobility with autonomous technology remains steadfast; every mile and simulation brings us closer, as Cruise operates as an AI-first company,” Barra stated.
Furthermore, GM is looking to restructure its joint venture with SAIC Motor in China, amid ongoing losses. The company reported a $104 million loss for the second quarter, and in June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, representing a 50% decline compared to the previous year.