General Motors has increased its financial forecasts for 2024 after outperforming Wall Street predictions during its second quarter. The Detroit-based automaker raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM updated 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.
For the second quarter, GM reported a revenue of $47.9 billion, marking an over 7% increase from the same period last year and exceeding the projected $45 billion by Wall Street analysts, as per FactSet estimates. The company’s earnings per share reached $3.06, significantly higher than the $2.71 anticipated and 60% greater than in 2023. Net income rose by 14% to $2.9 billion, compared to $2.5 billion in the previous year.
Following the report, GM’s stock price increased nearly 5% in pre-market trading. The stock has surged more than 37% this year, bolstered by the company’s declaration of a third-quarter cash dividend after the market closed on Monday.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She indicated that the company is in the process of launching eight new or redesigned vehicle models in North America. Barra also mentioned that GM is ramping up production of the electric Chevrolet Equinox, while maintaining a focus on disciplined volume growth despite their excitement for electric vehicles.
Earlier this month, Barra acknowledged that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market. The company has committed to being flexible and producing according to demand, although it did see growth in EV sales last quarter.
Barra also announced that Cruise, GM’s self-driving division, will discontinue its Origin vehicle and shift its focus towards using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a previous incident that led Cruise to scale back its operations. GM incurred a $600 million charge related to the suspension of Origin production in Detroit.
During a call with analysts, Barra stated that utilizing the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as its omission of a steering wheel. She mentioned that this shift would help reduce costs per unit and optimize resources for GM.
Furthermore, GM is working to restructure its joint venture with SAIC Motor in China, as it continues to face losses, including a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which was 50% fewer than the previous year, according to Automotive News.