General Motors has increased several financial forecasts for 2024 after exceeding Wall Street’s expectations in its second-quarter results.
The Detroit-based automaker raised its adjusted earnings estimate for the year to a range of $13 billion to $15 billion, up from the previous range of $12.5 billion to $14.5 billion. It also revised its operating cash flow and earnings per share targets. However, it slightly lowered its expectations for net income attributable to shareholders by less than 1%, now estimated at between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, representing more than a 7% increase from the previous year and surpassing Wall Street’s projected $45 billion, as reported by FactSet. Earnings per share stood at $3.06, exceeding the anticipated $2.71 and marking a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following this announcement, GM’s stock rose nearly 5% in pre-market trading, and it has gained more than 37% this year. The company also declared a cash dividend for the third quarter after trading closed on Monday.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gasoline-powered trucks and SUVs and mentioned the upcoming launch of eight new or redesigned models across various sizes in North America. She also discussed GM’s expansion of electric vehicle production, specifically the Chevrolet Equinox, while emphasizing a commitment to disciplined growth in electric vehicle sales.
Earlier this month, Barra indicated that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company has stated it would adapt production based on demand, although electric vehicle sales did increase last quarter.
Barra also announced a strategic shift for GM’s self-driving unit, Cruise, which decided to discontinue the Origin vehicle after scaling back operations following a previous incident. Cruise will now focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the production halt of the Origin in Detroit.
During a call with analysts, Barra explained that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This decision is expected to reduce unit costs and optimize resource allocation.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, as it has faced losses, including a $104 million deficit in the second quarter. In June, production at SAIC-GM was cut by 70%, resulting in the delivery of 26,000 vehicles—50% fewer than the same period last year.