General Motors has elevated several of its financial forecasts for 2024 after outperforming Wall Street expectations in its second-quarter earnings report.
The Detroit-based automotive giant has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, a revision from the previous estimate of $12.5 billion to $14.5 billion. GM has also raised its targets for operating cash flow and earnings per share, while slightly reducing expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a growth of over 7% compared to the same period last year and surpassing Wall Street predictions of $45 billion, according to estimates from FactSet. Earnings per share were recorded at $3.06, exceeding analysts’ expectations of $2.71 and representing a 60% increase from 2023. The company’s net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM shares surged nearly 5% in pre-market trading. The stock has appreciated more than 37% year-to-date. Additionally, after market hours on Monday, GM declared a third-quarter cash dividend, further boosting investor confidence.
In her letter to shareholders, CEO Mary Barra emphasized the robustness of the company’s gas-powered trucks and SUVs. She disclosed plans to launch eight new or redesigned models in North America, spanning various sizes. Barra also highlighted the ramp-up of production for the electric Chevrolet Equinox, stating, “As excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Earlier, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. However, she mentioned that the company will remain flexible and “build to demand,” despite an increase in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, which had to scale back operations after an incident last October, will discontinue its Origin vehicle. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge associated with the suspension of Origin production in Detroit.
During an analyst call, Barra noted that the use of the Bolt would address regulatory concerns related to the Origin’s atypical design, including the absence of a steering wheel. She also indicated that this shift would lower unit costs and help GM optimize its resource allocation.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra stated.
In addition, GM is working on restructuring its joint venture in China with SAIC Motor amid ongoing losses, having reported a $104 million deficit for the second quarter. Recently, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, which is a 50% decrease compared to the previous year.