General Motors (GM) is increasing its financial forecasts for 2024 after exceeding Wall Street’s expectations for its second quarter earnings. The automaker has revised its projected adjusted earnings for the year to between $13 billion and $15 billion, up from an earlier range of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing the Wall Street projection of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding the $2.71 per share analysts had anticipated and reflecting a 60% increase from the same period in 2023. The company’s net income grew by 14%, reaching $2.9 billion compared to $2.5 billion a year ago.
Following these results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, bringing its total gain for the year to more than 37%. After the market closed on Monday, GM announced a cash dividend for the third quarter, contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, revealing plans to launch eight new or redesigned models across various sizes in North America. Barra mentioned that while the company is excited about its electric vehicles (EVs), including the Chevrolet Equinox, it remains committed to disciplined volume growth, despite acknowledging that GM will not achieve its goal of producing 1 million EVs in North America by the end of 2025 due to a slowdown in the market.
Barra also discussed the company’s self-driving unit, Cruise, which was compelled to scale back its operations following an incident last October. Cruise has decided to abandon its Origin vehicle and will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision incurred a $600 million charge for GM due to halting Origin production in Detroit.
During a conference call with analysts, Barra reassured that the shift to the Bolt addresses regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. She stated that this move will reduce per-unit costs and allow GM to better optimize its resources.
Barra also acknowledged GM’s efforts to restructure its joint venture in China with SAIC Motor due to ongoing losses, which included a $104 million loss in the second quarter. In June, SAIC-GM cut production by 70%, delivering only 26,000 vehicles, which is 50% less compared to the previous year, according to Automotive News.