General Motors has raised its financial forecasts for 2024 after exceeding Wall Street’s expectations in its second quarter results. The automaker now anticipates adjusted earnings for the year to be between $13 billion and $15 billion, an increase from a previous estimate of $12.5 billion to $14.5 billion. Additionally, targets for operating cash flow and earnings per share have also been updated. However, the forecast for net income attributable to shareholders has been slightly reduced, expected to range from $10 billion to $11.4 billion, a decrease of less than 1%.
For the second quarter, GM reported revenue of $47.9 billion, representing a more than 7% increase from the previous year and surpassing the Wall Street expectation of $45 billion, according to FactSet estimates. Earnings per share were $3.06, exceeding the analysts’ forecast of $2.71, and showing a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM’s stock rose nearly 5%. The stock has now seen an increase of over 37% this year. Following the market closure on Monday, GM announced a cash dividend for the third quarter, which contributed to the stock’s surge.
CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and informed shareholders that the company is launching eight new or redesigned models in North America, covering compact, mid-size, and full-size segments. Barra expressed enthusiasm about scaling production of the electric Chevrolet Equinox and emphasized GM’s commitment to disciplined volume growth in electric vehicles (EVs), despite acknowledging that the goal of producing 1 million EVs in North America by the end of 2025 may not be achievable due to a slowdown in the market. Nevertheless, GM reported an increase in EV sales last quarter.
Barra also discussed the company’s self-driving unit, Cruise, which recently had to suspend its operations following an incident last October. Cruise will move away from its Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. The firm incurred a $600 million expense related to halting production of the Origin in Detroit.
During an analysts’ call, Barra explained that transitioning to the Bolt would address regulatory concerns over the Origin’s unconventional design, which lacks a steering wheel. This shift is expected to reduce per-unit costs and better allocate resources.
GM is also working to restructure its joint venture with SAIC Motor in China as the partnership has been facing losses; during the second quarter, the company reported a loss of $104 million. In June, SAIC-GM cut production by 70%, delivering only 26,000 vehicles, which is 50% fewer than the previous year, as reported by Automotive News.