General Motors has increased its financial forecasts for 2024 following a strong performance that exceeded Wall Street expectations for the second quarter.
The automaker has raised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from its previous projection of $12.5 billion to $14.5 billion. Additionally, targets for operating cash flow and earnings per share have also been enhanced. However, the outlook for net income attributable to shareholders has been slightly lowered by less than 1%, now estimated to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, which marks a more than 7% increase from the previous year and surpasses the $45 billion expected by analysts, according to FactSet estimates. Earnings per share reached $3.06, beating analyst expectations of $2.71 and representing a 60% increase compared to 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM shares saw a nearly 5% rise in pre-market trading on Tuesday, and the stock has more than 37% increase this year. Additionally, GM declared a third-quarter cash dividend after Monday’s trading, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the successful sales of their gas-powered trucks and SUVs and mentioned that the company plans to launch eight new or redesigned models across various sizes in North America. Barra emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume 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, attributing this to a market slowdown. The company has expressed intentions to remain flexible and adjust production based on demand, although it did report an increase in EV sales last quarter.
Barra also shared that Cruise, GM’s self-driving division which previously curtailed operations after an incident last October, will discontinue its Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the suspension of Origin production in Detroit.
During a call with analysts, Barra explained that the decision to utilize the Bolt would address regulatory concerns regarding the Origin’s unusual design, which notably lacks a steering wheel. This strategic change is expected to reduce costs per unit and improve resource optimization.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra stated.
Moreover, GM is working on restructuring its joint venture with SAIC Motor in China as it continues to face losses; the company reported a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70% and delivered 26,000 vehicles, which is 50% less than the same period last year, according to Automotive News.