General Motors has increased its financial outlook for 2024 following strong performance that exceeded Wall Street’s expectations during the second quarter.
The company now anticipates adjusted earnings for the year to range between $13 billion and $15 billion, a rise from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while adjusting its expectations for net income attributable to shareholders down slightly, now projecting between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase year-over-year and surpassing the $45 billion anticipated by analysts, according to FactSet estimates. Earnings per share stood at $3.06, exceeding the expected $2.71, and representing a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following this announcement, GM’s stock surged nearly 5% in pre-market trading on Tuesday, reflecting a year-to-date increase of over 37%. GM also declared a cash dividend for the third quarter after the market closed on Monday, contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, mentioning plans to launch eight new or redesigned models across various sizes in North America. She emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox, noting a disciplined approach to volume growth.
Despite earlier optimism, 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. The company will remain flexible and “build to demand,” although it reported growth in EV sales last quarter.
In further developments, Barra announced that Cruise, GM’s self-driving division, will abandon its Origin vehicle. Instead, Cruise will shift focus to the next-generation Chevrolet Bolt for testing in Texas and Arizona, following a pause in the Origin’s production. GM incurred a $600 million charge due to this production halt.
Barra asserted that using the Bolt would alleviate regulatory concerns regarding the Origin’s unconventional design, such as its lack of a steering wheel, while also reducing costs per unit and optimizing resources.
GM is also working to restructure its joint venture in China with SAIC Motor due to ongoing financial losses, having reported a $104 million loss for the second quarter. In June, SAIC-GM significantly diminished production by 70%, delivering 26,000 vehicles, which is down 50% from the prior year, as reported by Automotive News.