General Motors has elevated several of its financial projections for 2024 following a significant second-quarter performance that exceeded Wall Street expectations.
The automaker has updated its adjusted earnings forecast for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share. Meanwhile, the outlook for net income attributable to shareholders has been slightly reduced by less than 1%, now expected to be between $10 billion and $11.4 billion.
In the second quarter, GM generated revenue of $47.9 billion, marking a more than 7% increase from the same period last year and surpassing Wall Street’s expectation of $45 billion, according to FactSet. The company reported earnings per share of $3.06, exceeding the anticipated $2.71 and reflecting a 60% rise compared to 2023. Net income rose by 14%, amounting to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading, continuing a strong performance with shares climbing over 37% so far this year. GM also declared a third-quarter cash dividend, contributing to the stock’s boost.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of the company’s gas-powered trucks and SUVs while detailing the launch of eight new or redesigned models in North America. Barra confirmed that GM is ramping up production of the electric Chevrolet Equinox and emphasized that the company remains committed to disciplined volume growth in its electric vehicle (EV) offerings.
Earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million EVs in North America by the end of 2025 due to a market slowdown. The company noted it would adapt its production plans according to demand, although EV sales had increased in the last quarter.
Barra also revealed that Cruise, GM’s self-driving division, would no longer pursue its Origin vehicle, instead opting to use the next-generation Chevrolet Bolt for testing in Texas and Arizona. This shift comes after GM recorded a $600 million charge associated with stopping Origin production in Detroit.
During a call with analysts, Barra explained that utilizing the Bolt would alleviate concerns from regulators regarding the unique design of the Origin, which did not include a steering wheel. This strategic change aims to reduce costs and enhance resource optimization for GM.
“Our vision to transform mobility through autonomous technology remains intact, and each mile traveled and simulation brings us closer, as Cruise is fundamentally an AI-first company,” Barra remarked.
Moreover, GM is working to reform its joint venture in China with SAIC Motor, as the collaboration continues to incur losses, including a $104 million loss in the second quarter. In June, SAIC-GM cut production by 70%, delivering 26,000 vehicles, which is a 50% decrease compared to the previous year.