General Motors has increased its financial forecasts for 2024 after exceeding analysts’ expectations in its second quarter results.
The Detroit automaker now anticipates adjusted earnings for the year to be between $13 billion and $15 billion, up from a previous range of $12.5 billion to $14.5 billion. GM also raised its targets for operating cash flow and earnings per share, although it slightly lowered its net income expectations for shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a 7% increase from the previous year and surpassing Wall Street’s expectations of $45 billion. Earnings per share were reported at $3.06, exceeding the anticipated $2.71 and reflecting a 60% growth compared to 2023. Net income for the quarter rose 14% to $2.9 billion, compared to $2.5 billion last year.
Following the news, GM’s stock rose nearly 5% in pre-market trading, and the stock has gained over 37% so far this year. After the market closed on Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She mentioned that the company is set to launch eight new or redesigned models across compact, mid-size, and full-size segments in North America. Barra also emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox and maintaining disciplined growth in electric vehicle (EV) output.
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowing market. The company plans to be flexible and produce according to demand, even as it reported growth in EV sales during the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, would scrap its Origin vehicle and instead focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the halted production of the Origin model in Detroit.
In her comments to analysts, Barra stated that utilizing the Bolt would alleviate regulatory concerns regarding the innovative design of the Origin, which lacked a steering wheel. This pivot is expected to reduce costs and optimize resources for GM.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, emphasizing that every mile and simulation contributes to progress, as Cruise remains focused on AI-driven solutions.
Lastly, GM is looking to restructure its joint venture with SAIC Motor in China, in light of ongoing losses. The company reported a $104 million loss for the second quarter. In June, SAIC-GM drastically reduced production by 70%, delivering 26,000 vehicles, which is 50% less than the same time last year.