General Motors has raised several financial forecasts for 2024 after significantly exceeding Wall Street’s expectations during its second quarter.
The Detroit-based automaker now anticipates adjusted earnings for the year to be between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, it has revised its targets for operating cash flow and earnings per share upward, while slightly lowering expectations for net income attributable to shareholders by less than 1%, now projected between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, marking an over 7% increase from the same period last year and surpassing the $45 billion anticipated by analysts. Earnings per share stood at $3.06, exceeding the expected $2.71 and representing a 60% increase compared to 2023. Net income also grew by 14%, from $2.5 billion to $2.9 billion.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has risen over 37% this year. The company announced a third-quarter cash dividend after trading closed on Monday, providing additional support to the stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, mentioning that GM is set to launch eight new or redesigned vehicles across various segments in North America. She emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox, stating that while the company is enthusiastic about its electric vehicles, it remains dedicated to disciplined growth.
Earlier this month, 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 plans to be flexible and “build to demand,” although EV sales did increase in the last quarter.
Barra also announced a strategic shift for Cruise, GM’s self-driving division, which will abandon the Origin vehicle project in favor of the next-generation Chevrolet Bolt for testing purposes in Texas and Arizona. GM incurred a $600 million charge related to the discontinuation of Origin production in Detroit.
During a communication with analysts, Barra stated that switching to the Bolt would address regulatory concerns regarding the Origin’s unconventional design, which lacks a steering wheel. This adjustment is expected to reduce costs per unit and optimize resource allocation for GM.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, emphasizing that every mile and simulation brings the company closer to its goals.
Moreover, GM is working to reorganize its joint venture with SAIC Motor in China, as it continues to face losses, having recorded a $104 million loss for the second quarter. In June, the SAIC-GM joint venture slashed production by 70%, delivering just 26,000 vehicles, which is a 50% decrease compared to the previous year.