General Motors has increased several financial forecasts for 2024 following a strong performance in the second quarter that exceeded Wall Street expectations.
The Detroit-based automaker raised its adjusted earnings estimate for the year to between $13 billion and $15 billion, up from a previous range of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share. The forecast for net income attributable to shareholders was slightly lowered by less than 1%, now projected at between $10 billion and $11.4 billion.
In its second-quarter results, GM reported revenue of $47.9 billion, marking a more than 7% increase from the same period last year and surpassing the anticipated $45 billion threshold, according to FactSet estimates. Earnings per share reached $3.06, exceeding the analysts’ expectation of $2.71 per share and representing a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, compared to $2.5 billion from the previous year.
GM’s stock saw a nearly 5% increase in pre-market trading on Tuesday and has registered a gain of over 37% so far this year. Following the trading sessions on Monday, GM announced a cash dividend for the third quarter, further bolstering its stock value.
In a letter to shareholders, CEO Mary Barra highlighted the successful performance of GM’s gas-powered trucks and SUVs and indicated plans to launch eight new or redesigned compact, mid-size, and full-size models in North America. She acknowledged the ongoing production scaling of the electric Chevrolet Equinox and emphasized the company’s commitment to disciplined volume growth despite the excitement surrounding its electric vehicle (EV) offerings.
Barra previously stated that GM will 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 expressed a willingness to adapt and “build to demand,” although EV sales did experience growth last quarter.
Furthermore, the CEO announced that Cruise, GM’s self-driving division, will abandon plans for its Origin vehicle, shifting focus to the next-generation Chevrolet Bolt for vehicle testing in Texas and Arizona. This change comes after Cruise faced setbacks in its operations following an incident last October. GM incurred a $600 million charge related to the halted production of the Origin in Detroit.
During a conference call with analysts, Barra noted that using the Bolt instead of the Origin would alleviate regulatory concerns associated with the unique design of the Origin, which lacked a traditional steering wheel. This decision is expected to reduce per-unit costs and enhance resource optimization.
“Our vision to transform mobility using autonomous technology remains steadfast, and each mile traveled and each simulation executed brings us closer, as Cruise operates as an AI-first company,” Barra stated.
Additionally, GM is restructuring its joint venture in China with SAIC Motor as it deals with ongoing losses, reporting a $104 million loss for the second quarter. Production was cut by 70% in June, resulting in the delivery of just 26,000 vehicles, which is a 50% decrease compared to the same period last year, according to reports.