General Motors has raised multiple financial forecasts for 2024 following a strong performance that exceeded Wall Street’s expectations for its second quarter.
The Detroit-based automaker has adjusted its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous guidance of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, although the forecast for net income attributable to shareholders has been slightly lowered by less than 1%, now expected to be between $10 billion and $11.4 billion.
In the second quarter, GM’s revenue reached $47.9 billion, marking over a 7% increase compared to the same period last year and surpassing the $45 billion projected by Wall Street analysts. Earnings per share stood at $3.06, exceeding the expected $2.71 per share and representing a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these developments, GM’s stock saw an almost 5% increase in pre-market trading on Tuesday, contributing to a year-to-date surge of more than 37%. Additionally, the company declared a third-quarter cash dividend after Monday’s market closure, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs, while also announcing plans to introduce eight new or redesigned models in North America, covering compact, mid-size, and full-size categories. Barra emphasized GM’s commitment to gradually increasing production of the electric Chevrolet Equinox but acknowledged that the goal of producing 1 million electric vehicles in North America by the end of 2025 may not be met due to a market slowdown. She assured shareholders that the company would remain flexible and build vehicles based on consumer demand, although electric vehicle sales did experience growth last quarter.
Barra also announced a strategic shift for GM’s self-driving unit, Cruise, which will no longer pursue its Origin vehicle following operational rollbacks due to a previous incident. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM has incurred a $600 million charge due to the halted production of the Origin in Detroit.
During a conference call with analysts, Barra noted that using the Bolt would address regulators’ concerns regarding the unique design of the Origin, which lacked a steering wheel. This adjustment is expected to reduce unit costs and streamline resource allocation, she added.
“Our vision to transform mobility using autonomous technology remains intact, with every mile traveled and simulation getting us closer because Cruise operates as an AI-first company,” Barra stated.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, having reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, which is half of the quantity sold during the same period last year, according to industry reports.